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Qualcomm Inflates Op Income by $1.1 Billion, Contradicts Footnote
Instead of including a legal windfall in Other Income as disclosed in a footnote, the chip firm used it to offset OpEx on Income Statement.
July 28, 2022
The footnotes in Qualcomm’s (QCOM) latest quarterly report reveal earnings were propped up by a successful appeal of a four year old fine. In 2018, the European Commission (EC) fined Qualcomm nearly $1 billion for anticompetitive behavior related to payments it made to Apple in return for being Apple’s exclusive chipset supplier.
In the latest quarter, the General Court of the European Union issued a ruling annulling the EC’s decision.
Instead of including the $1.1 billion benefit in Other Income— as Qualcomm states in a footnote— the company included the amount in a special line item labeled “Other” and used it to offset operating expenses. Though it doesn’t appear in the prior three quarterly filings, Qualcomm has used this special line item before, most recently in the quarter ending March 29, 2020.
The treatment added $1.1 billion to operating income, or 23.7%.
Related: AAPL, NVDA, AMD, TXN, AVGO, NXPI, SWKS, QRVO,
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