Qualcomm soared as much as 13% after hours on Wednesday as the company reported fiscal third-quarter earnings that beat expectations and announced a long-term patent agreement with Huawei, settling a major unanswered legal question for the company.

Here’s how it did versus Refinitiv consensus estimates:

  • EPS: 86 cents (non-GAAP), vs 71 cents estimated.

  • Revenue: $4.89 billion vs. $4.8 billion estimated.

However, it’s difficult to compare reported earnings to analyst estimates, as the coronavirus pandemic continues to affect global economies and makes forecasting difficult.

Revenue was flat year over year and diluted EPS was up 8% year over year.

Qualcomm stands to benefit heavily from 5G networks being built and issued a strong forecast for its upcoming quarter, suggesting that 5G is starting to become an economic force. Qualcomm sells modem chips to phone makers, and licenses critical patents to anyone using 5G technology.

The company also said it had entered into a long-term patent agreement with Huawei, which will be a major vendor of 5G phones and network equipment. Qualcomm said it expects to record $1.8 billion in settlement payments from Huawei in the quarter ending in September. Qualcomm settled similar patent lawsuits with Apple, a major handset customer, last year.

With the signing of the Huawei agreement we are now entering a period in which we have multiyear license agreements with every major handset OEM,” Qualcomm CEO Steve Mollenkopf said on a call with analysts.

I believe this significantly de-risks Qualcomm investors,” said Patrick Moorhead, analyst at Moor Insights.

Qualcomm said that it expected that 5G handset shipments would be 15% lower year over year in the quarter ending in September, partially due to an unnamed customer delaying a “global 5G flagship phone launch.” Qualcomm expects a decrease in non-GAAP EPS of 25 cents per share. Qualcomm said it still expects between 175 million and 225 million 5G handsets to be shipped in 2020.

Qualcomm’s view on 5G handset schedules has shifted from last quarter, when Qualcomm said that its customers, which include Apple, were likely to continue to release 5G phones on previous schedules.

The company expects to report between $1.05 and $1.25 in non-GAAP diluted EPS, and revenue excluding certain items between $5.5 billion and $6.3 billion, for the quarter ending in September.