Shares of Qualcomm sank this morning after the company posted a lackluster fiscal third quarter due largely to its ongoing licensing dispute with Apple.

The chipmaking giant posted (PDF) $5.4 billion in revenue, down 11% year over year, and net income fell a whopping 40% to $900 million. Operating income came in at $1.6 billion, down 51% year over year.

The results were generally in line with Wall Street expectations, but investors seemed surprised nonetheless, sending shares down more than 5% by midday Thursday.

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“We delivered better-than-expected results in our semiconductor business this quarter, which drove EPS above the midpoint of our expectations versus our April updated guidance,” Qualcomm CEO Steve Mollenkopf said in a prepared statement. “Our products and technologies continue to enable the global smartphone industry, and we are expanding into many exciting new product categories, including automotive, mobile computing, networking and IoT. We believe that we hold the high ground with regard to the dispute with Apple, and we have initiated new actions to protect the well-established value of our technology.”

The San Diego-based firm is in a massive battle with Apple that began in January over patent royalties. The iPhone vendor earlier this year filed a $1 billion lawsuit against Qualcomm, contending the chipmaker insists on onerous royalties for its technologies and demands payments for technologies it didn’t develop, such as Apple’s Touch ID. Apple claimed in that suit that it “has been overcharged billions of dollars on Qualcomm’s illegal scheme,” although the suit seeks damages of just less than $1 billion.

Qualcomm filed a countersuit in April, claiming among other things that the iPhone vendor “breached” and “mischaracterized” agreements with the chipmaker and interfered in deals with Qualcomm licensees.

Apple returned fire last month, saying in a legal filing that evidence increasingly indicated Qualcomm’s business model is “illegal.” The new claims alleged that Qualcomm’s strategy “burdens innovation,” Bloomberg reported, and that some patents for which Qualcomm is demanding royalties are invalid.

Apple also said Qualcomm has failed to fulfill its obligation to charge fair and reasonable rates for the patents. The standoff escalated even further this week when four contract manufacturers joined Apple, filing a lawsuit claiming Qualcomm’s licensing practices are illegal, The Wall Street Journal reported.

Meanwhile, Qualcomm is fighting multiple other legal battles around the world. In April, Nvidia sued Qualcomm in London, alleging it had unfairly forced Nvidia to pull the plug on the Icera business it bought in 2011. Qualcomm also faces a fine in South Korea of $853 million over alleged antitrust violations.

And earlier this year, the FTC filed suit against Qualcomm, accusing it of using anticompetitive tactics to “maintain its monopoly” as the dominant vendor of semiconductors for phones and other mobile gadgets. The agency said Qualcomm imposed “onerous and anticompetitive supply and licensing terms” on hardware manufacturers, violating the FTC Act on several fronts.