“É o preconceito contra a flexibilização que tem conduzido a salários baixos”

[Alfred E. Neuman]

4 Outubro 2004

[Alfred E. Neuman]

Qualcomm's Crystal Ball Gets Hazy
By Dave Mock
September 17, 2004

Wireless technology kingpin Qualcomm (Nasdaq: QCOM) issued revised guidance today, slightly increasing its expected fourth-quarter revenue and earnings along with full fiscal-year financials. The company stated that the improved outlook gave it confidence that it would hit the high end of -- or just slightly above -- its previous guidance in each area.

The news was refreshing on one front -- it settled some nerves in the market that Qualcomm would follow Texas Instrument's (NYSE: TXN) cue and cite upcoming weakness in semiconductor sales to wireless device makers because of its customers' trimming inventory levels. Instead, it followed Nokia's (NYSE: NOK) upbeat outlook in maintaining that mobile phone sales volumes are still looking up. Qualcomm now sees calendar year 2004 mobile phone sales using its technology to be in the range of 170 million to 176 million units, more than the earlier view of 161 million to 168 million.

But Qualcomm's stock took a hard hit this morning, falling as much as 7% at the opening bell. What really got the market in a tizzy was a statement from Qualcomm about royalty recognition: It may change how it books ongoing royalty from its licensees. The change could impact its reported fourth-quarter income by as much as $298 million.

The $298 million slug in the chest would come if Qualcomm chose to convert all of its licensees' income to an as-reported basis of accounting rather than the current method of project and adjust. Currently, Qualcomm estimates earned royalty income from licensees' sales in the current quarter and then adjusts this amount three months later when the licensees actually report their past-quarter sales to Qualcomm.

The company is now questioning its ability to accurately project sales of some of its licensees. Its press release gave several reasons for this, but it ultimately boils down to this: Qualcomm does not own the code division multiple access (CDMA) chipset market anymore, and it has less visibility in the wideband CDMA market.

In the past, Qualcomm sold almost all the CDMA chips to vendors making mobile phones. This gave it great visibility into how many handsets its customers were planning to sell and actually selling, so it could fairly accurately predict how much royalty it would earn. With many other vendors such as Samsung now producing its own CDMA and WCDMA chipsets, Qualcomm has less visibility into how many phones are being made and sold with its technology inside.

Ultimately, the potential change doesn't amount to a hill of beans -- the company still commands the lead in CDMA technology, and the level of royalty has not changed. Smart investors have known for a long time now that Qualcomm will be giving up its near monopoly of the CDMA chip market in return for increased royalty on higher product volumes from suppliers. It's a natural development of a maturing market, one that Qualcomm is still well positioned to capitalize on.

If you missed Qualcomm's run up but want in on the next great stock, you'll want to check out David Gardner's new growth newsletter, debuting soon. Be the first to hear about it.

Fool contributor Dave Mock likes to project how many millions he'll make in future quarters, but he always seems to come up short. He owns no shares of companies mentioned here, but he has authored a book on the company, The Qualcomm Equation.

[Alfred E. Neuman]

Qualcomm falls on effects of potential acct. change (QCOM)

By Tomi Kilgore
NEW YORK (CBS.MW) -- Shares of Qualcomm (QCOM) fell over 5.5 percent at Friday's open, although the company increased its fourth-quarter earnings and CDMA mobile phone shipment forecasts, after the company said that a review of its accounting for royalties may reduce fourth-quarter pre-tax earnings by $298 million. The stock was last down $2.22 at $38.18. The company added that the potential change in accounting would have no effect on operating cash flow or the underlying economics of its licensing business

[Alfred E. Neuman]

Qualcomm lifts Q4 earns, CDMA phone shipment forecast (QCOM) By Tomi Kilgore

NEW YORK (CBS.MW) -- Qualcomm (QCOM) raised its fourth-quarter earnings forecast excluding its strategic initiatives segment to 28 to 30 cents a share from 27 to 29 cents, amid an increase outlook on CDMA phone shipments. Revenue for the quarter is expected to increase 60 to 62 percent over year-earlier levels. The company now sees CDMA phone shipments of 46 million at an average selling price of $210 vs. prior expectations of 44 million phones at an average price of $206. For 2004, the wireless technologies company lifted its earnings projection excluding its strategic initiatives segment to $1.09 to $1.10 a share from $1.08 to $1.09. The stock closed Thursday down 17 cents at $40.40

[Alfred E. Neuman]

5:41am 09/16/04

Qualcomm cut to neutral at CSFB, '3G priced in' (QCOM)
By Emily Church

LONDON (CBS.MW) -- Credit Suisse First Boston overnight cut its rating on Qualcomm (QCOM) to neutral from outperform, but said it was maintaining its $42.50 price target on the stock, saying the "aggressive ramp" expectations for 3G are already priced in by the market. "we believe our calendar 2005 WCDMA sell-in estimate of 55 million units is in line with market expectations and view upside/ downside potential to be fairly balanced, given remaining hurdles to overcome for more aggressive growth in Europe, regulatory uncertainty in China and merger integration challenges facing Cingular and AT&T Wireless in the U.S," CSFB told clients

[Alfred E. Neuman]

Apple Computer and QCOM are the final two tech stocks that form the basket of tech stocks that I am currently involved in. I must confess that I trimmed a piece of QCOM at 39 and change the other day because it is slightly extended. QCOM trades close to 30 percent above its 200-day moving average and the stock really has to come in to the 36 to 37 level for it to be attractive. So I took a piece out but am prepared to buy more coming in to its rising 50-day line.

QCOM has a rising 50- and 200- day line and perhaps the best performing large-cap tech stock around. It has been this year and over the last 52 week as well. The stock split 2-for-1 the other day implying confidence. The stock popped into this current advance as the rising 50-day line came in direct contact with the share price.

The last break out in the stock occurred on august 19th. The stock rose at that time in better then average trade pulling away form its rising 50 day line. The stock wants to stay around and trade near that line and as long as that line is rising the stock is likely to follow suite. Place the stop at 33.99.