Boston, MA 01/29/2014 (wallstreetpr) – Qualcomm Inc.(NASDAQ:QCOM) the US-based, low-cost chipmaker is in ‘anti-trust’ trouble in China. The company best known for its mobile processor, SnapDragon, used mostly on white-label low cost mobile phones manufactured or assembled in China, faces penalties to the tune of $1Billion, if a current probe were to prove allegations.
Chinese Commission begins probe
National Development and Reform Commission (NDRC), one of China’s highest regulatory bodies, is currently in talks with Qualcomm Inc. (NASDAQ:QCOM) representatives over issues of violating ‘trust’ and not complying with regulatory guidelines of operations in the country. NDRC carries the power to fine companies operating in China between 1 to 10 per cent of the revenue earned, if found guilty of violating state laws. In Qualcomm’s case this could be to the tune of $1 billion, for the company has filed its financial year 2012 returns as $12.3 billion. Meanwhile, Qualcomm Inc. first quarter earnings report will also provide room for further penalty negotiations.
However, Qualcomm Inc. (NASDAQ:QCOM) representatives are attempting negotiations and may offer licenses as well as technology transfer in favour of lowered penalties. Further confirmation is expected from NDRC and Qualcomm representatives are awaited on the anti-trust probe.
Samsung slowdown may affect Qualcomm revenues
Samsung Electronics, one of the major manufacturers using Qualcomm Inc. (NASDAQ:QCOM) processors, has reported massive drop in sales, given the high saturation in the handset segment. This will have an impact on Qualcomm’s earnings report for the first quarter.
Estimated guidance for first quarter was EPS $1.26, while revenues are expected to beat estimates by over 10.8%.
Qualcomm Inc. (NASDAQ:QCOM) is at the second spot on the Nasdaq 100 reporting over 30% for the previous fiscal. Current first quarter reports are expected to provide further momentum for this technology major. The growth in the 3G, 4G and LTE quarters have proven to be the primary driver for stock price surge. Other services, such as IZAT location along with Gobi 3G and 4GLTE components have bolstered Qualcomm profits thus far.
