Qualcomm stock surges more than 20% as Apple agrees to settlement
Apple Inc. and Qualcomm Inc. agreed on Tuesday to drop all their lawsuits against each other worldwide, causing Qualcomm's stock to pop. Qualcomm shares rallied 21% to $69.35 in recent trading, while Apple shares rose 0.2% to $199.64. Meanwhile, shares in Intel Corp. , Apple's other supplier for wireless modem chips, sharply pared gains and were last up 0.1% at $56.31. Apple agreed to pay Qualcomm an undisclosed sum in a settlement and to a six-year licensing agreement effective April 1, that includes a two-year option to extend, and a multiyear chipset supply agreement. Qualcomm said the settlement will add about $2 a share in earnings "as product shipments ramp" but did not provide a specific time period for the earnings boost. Qualcomm was not immediately available for comment. Analysts surveyed by FactSet expect earnings of 70 cents a share for the fiscal second quarter and $3.83 a share for the fiscal year. The two sides were actively arguing opening statements in a trial in San Diego, Calif., as the agreement was announced.
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