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Qualcomm affirms $975M fine in China antitrust settlement; alters outlook

Earnings per share are also projected to land a little higher with estimates between $4.85 to $5.05 a pop, compared to the prior guidance range of $4.75 to $5.05.
Written by Rachel King, Contributor on

Qualcomm has confirmed and outlined a plan meant to satisfy Chinese regulators following an antitrust suit.

At the top of the agenda is a penalty costing the chip maker $975 million, which Qualcomm has said it will not protest.

The outline follows reports earlier on Monday already hinting at the record fine of $1 billion in order to end a 14-month antitrust probe. China had previously alleged Qualcomm's licensing practices are anti-competitive.

In December 2014, a statement released by China's National Development and Reform Commission (NDRC) promised the case would be settled "very soon," and the results of the antitrust probe would be released at a suitable time to be determined by the Chinese government.

Qualcomm executives and NDRC officials met last Friday with the hopes of solving the dispute.

Thus, Qualcomm has agreed to a number of new business practices and measures specific to the region.

For starters, Qualcomm will offer licenses to its current 3G and 4G Chinese patents separately from licenses to its other patents.

But above all, Qualcomm must provide existing licensees in China with the choice of electing to accept the new terms on sales of branded devices for use as of January 1, 2015.

However, Qualcomm does not have to sell chips to any organization or supply chain partner in China that is not a Qualcomm licensee.

Qualcomm also took the opportunity to alter its outlook for the fiscal year ending September 27, 2015.

The San Diego-headquartered company is now projecting revenue to fall between $26.3 billion and $28.0 billion, slightly up from the previous guidance range of $26.0 billion to $28.0 billion.

Earnings per share are also projected to land a little higher with estimates between $4.85 to $5.05 a pop, compared to the prior guidance range of $4.75 to $5.05.

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