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Qualcomm shares rise to record highs after gains suggest big gains from the Huawei settlement

The shares of Qualcomm Inc. skyrocketed to record highs in the extended session on Wednesday, after the chip company expected a big jump in earnings and revenues in the current quarter thanks to a settlement with Chinese technology giant Huawei.

Qualcomm QCOM,
+ 1.72%
after hours, the stock rose by more than 10%, after rising 1.7% in the regular session to $ 93.03. Shares were $ 100 during the out-of-hours session; Qualcomm stocks briefly hit $ 100 in intraday trading before the dot-com crash in 2000, but have not reached triple numbers since, hitting a record high of $ 95.91 in January.

The company reported a third-quarter fiscal net result of $ 845 million, or 74 cents per share, compared to $ 2.15 billion, or $ 1.75 per share, for the prior year period. Adjusted for share-based compensation and other securities, earnings were 86 cents per share, compared to 80 cents per share in the same period last year.

Sales were even $ 4.89 billion last year. Net income and income for the same period last year was adjusted by license income from a settlement of Apple Inc. Exclude AAPL,
+ 1.91%

Analysts surveyed by FactSet had forecast adjusted earnings of 71 cents per share on revenue of $ 4.81 billion.

Qualcomm expects fourth-quarter GAAP earnings from $ 2.12 to $ 2.32 per share with revenues from $ 7.3 billion to $ 8.1 billion, well ahead of analyst estimates. Qualcomm entered into a settlement with Huawei that will reportedly add approximately $ 1.8 billion in revenue and $ 1.38 in earnings per share. After adjusting for Huawei’s one-time windfall, Qualcomm said it would have adjusted earnings from $ 1.05 to $ 1.25 per share. Analysts had forecast adjusted earnings of $ 1.09 per share with revenues of $ 5.76 billion.

“We made gains above the high level of our range, continued to execute in our product and licensing businesses and entered into a new long-term licensing agreement with Huawei, which positions us all well for the balance sheet of 2020 and beyond,” Chief Executive Steve Mollenkopf said in a prepared statement.

The settlement includes money that Qualcomm owes from previous quarters, as well as a new, worldwide, worldwide patent licensing agreement, Qualcomm revealed.