Chip designer Qualcomm reported the results of its fiscal third quarter that ended on June 28th. Revenue for the three months came in at $4.89 billion which was flat with the prior year’s fiscal third-quarter revenue after deducting $4.7 billion received from a settlement with Apple in 2019. Earnings of $845 million or 74 cents per share were up 8% on an annual basis and also topped estimates of 71 cents a share.

While the numbers were good, the big story is that Qualcomm reported that it signed a long-term patent agreement with Huawei to end a dispute. The no license no chips philosophy used by Qualcomm is still being appealed in court by the company after a negative court decision, and will definitely help the company this year as manufacturers like Huawei buy 5G chips for its phones and networking equipment. Qualcomm says that it will record $1.8 billion in settlement payments from Huawei during the current quarter that ends in September. Patrick Moorhead, an analyst at Moor Insights, stated that Qualcomm now has long-term licensing agreements with every major smartphone manufacturer. As a result of the deal with Huawei, Qualcomm’s shares soared $11.57 or more than 12% in after-hours trading to $104.60.

Qualcomm also dropped a hint that the launch of the 5G iPhone 12 series is going to be delayed. The company said that 5G handset shipments will decline 15% on a year-over-year basis in the current quarter. The chip designer says the reason for the drop is due to an unnamed customer delaying a “global 5G flagship phone launch.” It seems that Qualcomm is talking about Apple which traditionally starts shipping the newest iPhone models in September, which is part of the current quarter. This delay could cost the company as much as 25 cents a share in earnings. The firm still expects 175 million to 225 million 5G handsets to be shipped this year.

Qualcomm CEO Steve Mollenkopf says, “As 5G continues to roll out, we are realizing the benefits of the investments we have made in building the most extensive licensing program in mobile and are turning the technical challenges of 5G into leadership opportunities and commercial wins. We delivered earnings above the high end of our range, continued to execute in our product and licensing businesses and entered into a new long-term patent license agreement with Huawei, all of which position us well for the balance of 2020 and beyond.” The company says that it should report non-GAAP diluted earnings in a range of $1.05-$1.25 a share for the fiscal fourth quarter.