Qualcomm is reportedly planning a new strategic review that could lead to a break-up of the company.
The chip maker might announce the review alongside its quarterly results presentation on Wednesday, the Wall Street Journal revealed, citing sources familiar with the situation.
Qualcomm is under pressure from investors, particularly Jana Partners, to explore the possibility of a break-up, as well as to cut costs, buy back more shares, and reshuffle its board, the paper said.
Its sources explained that any review would likely encompass all of the above.
Any split would likely see Qualcomm’s chip making business separated from its patent licensing business.
The chips business, known as QCT, brought in 64% of Qualcomm’s US$6.89 billion in revenues in its fiscal Q2, the three months to 29 March, with 35% coming from patents.
"While we remain confident in the significant growth opportunities ahead, we are reducing our QCT outlook for fiscal 2015, primarily due to the increased impact of customer share shifts within the premium tier and a decline in our share at a large customer," said Qualcomm CEO Steve Mollenkopf, in April, when the results were published.
The firm said it expects to generate revenues of $5.4 billion-$6.2 billion in fiscal Q3, below the $6.8 billion it recorded in the year-ago quarter.
Its full year guidance puts revenue at $25 billion-$27 billion, down from earlier guidance of $26.3 billion-$28 billion. In full year 2014 it posted revenues of $26.5 billion.
"In addition to our ongoing expense management initiatives, we have initiated a comprehensive review of our cost structure to identify opportunities to improve operating margins while at the same time extending our technology and product leadership positions," Mollenkopf added.
