Old news, but it should start this thread going.
The following earnings release was issued at 1:30 p.m. PST. To view the
financial statements, please log into our external web site at
<http://www.qualcomm.com>.
QUALCOMM Contact:
Julie Cunningham
Investor Relations
Phone: (619) 658-4224
Fax: (619) 651-2590
QUALCOMM Reports Record First Quarter Results
- Revenues $786 Million, $.58 EPS Before One-Time Items-
SAN DIEGO - January 20, 1998 - QUALCOMM Incorporated (NASDAQ: QCOM) today
reported record first quarter results with revenues of $786 million for the
first quarter of fiscal 1998, more than doubling revenues of $389 million
for the year ago quarter and a 31 percent increase over last quarter. Net
income for the first quarter was $37 million compared with $9 million for
the same period in fiscal 1997. Earnings per share for the first quarter
of fiscal 1998 was $.50 per share (diluted) compared with $.13 per share
(diluted) for the same period in fiscal 1997.
Earnings per share before one-time items in the first quarter of fiscal
1998 was $.58 per share (diluted). Non-recurring items included the
write-off of in-process research and development acquired in the purchase
of assets from Now Software and the write-down of obsolete leased
equipment. These one-time items were partially offset by a gain on the
sale of an investment.
"We shipped a record number of CDMA phones and chip sets in the first
quarter of fiscal 1998, with good progress in ramping production and
improving the yields in our new phone models, particularly in the second
half of the quarter," said QUALCOMM Chairman and CEO, Dr. Irwin Jacobs. "In
addition, we continued to expand our market position as a major supplier of
cdmaOne(tm) infrastructure with agreements in Africa, Eastern Europe and
Asia during the quarter. Globalstar development accelerated and the
OmniTRACS installed base grew to total more than 224,000 units worldwide.
We continue to focus on managing growth and improving profitability."
"Demand for our ASIC products in South Korea continues to be positive and
we remain confident in the long-term prospects for CDMA in the region. We
also expect that our Korean licensees will expand their export activities
in the near-term, which will ultimately benefit the worldwide acceptance
and deployment of CDMA," Jacobs added.
Highlights of Financial Performance
Communications systems revenues of $677 million for the first quarter of
fiscal 1998 more than doubled revenues for the same period last year. This
significant increase was driven by the continued growth in the sales of
Code Division Multiple Access (CDMA) phones, Application Specific
Integrated Circuits (ASICs) and infrastructure equipment.
Communications systems gross margin for the first quarter was 25 percent
compared to 20 percent in the first quarter of fiscal 1997, reflecting
overall increased margins on the sale of CDMA equipment due to lower costs
achieved with high volume manufacturing and a greater volume of ASICs sales.
License, royalty and development fees were $45 million or 6 percent of
total revenues for the first quarter of fiscal 1998, compared to $26
million or 7 percent of total revenues for the year ago period, both on a
cash basis. New licensees included Synertek (subscriber license) and
Marconi Instruments (test equipment license). The Company expects to
continue to experience quarterly fluctuations in license, royalty and
development fees due to the variability in the amount and timing of CDMA
licenses and royalties.
Contract services revenues were $64 million for the quarter, a 66 percent
increase over the fiscal 1997 first quarter revenue of $39 million. The
increase is attributable to the development agreement with Globalstar which
began in 1994.
Operating expenses, including research and development, selling and
marketing and general and administrative, increased to $167 million or 21
percent of revenue in the first quarter of fiscal 1998 compared to $89
million or 23 percent of revenues for the same period last year. The
Company continues to invest in the research and development of new CDMA
infrastructure, ASIC and subscriber products. Selling and marketing
expenses increased due to higher volume of sales along with increased
national and international marketing activities. General and administrative
expenses continue to increase to support the overall growth in the
Company's operations, as well as increased litigation expenses.
On November 10, 1997, the Company acquired Now Software, Inc. In
conjunction with the acquisition, the purchase price of approximately $10
million was allocated to the assets acquired based upon their fair market
values. Assets acquired included certain software products still in the
development stage which are not considered to have reached technological
feasibility. This purchased "in-process research and development" totaled
$7 million and was expensed at the acquisition date.
During the quarter, the Company recognized other expenses of $5 million for
the write-down of leased manufacturing equipment that is no longer utilized
in the manufacturing process.
Interest income increased to $12 million for the first quarter of fiscal
1998, representing the increased cash balance as a result of proceeds
received from the Trust Convertible Preferred Securities offering during
the second fiscal quarter of 1997.
Other non-operating items in the first quarter of fiscal 1998 primarily
include income related to a gain on the sale of shares in Entel Telefonia
Movil S.A. and the net minority interest in QUALCOMM Personal Electronics
and other consolidated subsidiaries.
The effective tax rate for the first quarter of fiscal 1998 was 35 percent,
compared to 25 percent in the first quarter of fiscal 1997.
Headquartered in San Diego, QUALCOMM develops, manufactures, markets,
licenses and operates advanced communications systems and products based on
its proprietary digital wireless technologies. The Company's primary
product areas are the OmniTRACSr system (a geostationary satellite-based,
mobile communications system providing two-way data and position reporting
services), CDMA wireless communications systems and products and, in
conjunction with others, the development of the GlobalstarT low-earth-orbit
(LEO) satellite communications system. Other Company products include the
Eudora ProT electronic mail software, ASIC products, and communications
equipment and systems for government and commercial customers worldwide.
For more information on QUALCOMM products and technologies, please visit
the Company's web site at <http://www.qualcomm.com>.
Except for the historical information contained herein, this news release
contains forward-looking statements that are subject to risks and
uncertainties, including the ability to develop and introduce cost
effective new products in a timely manner, potential delays in the
commercial implementation of the Company's CDMA technology, continued
growth in the CDMA subscriber population and the scale-up and operations of
CDMA systems, developments in current or future litigation, the Company's
ability to effectively manage growth and the intense competition in the
wireless communications industry, risks associated with vendor financing,
timing and receipt of license fees and royalties, the Company's ability to
successfully manufacture and sell significant quantities of CDMA handsets,
ASICs and infrastructure equipment on a timely basis, failure to satisfy
performance obligations, change in economic conditions of the various
markets the Company serves, continued currency fluctuations and risk, as
well as the other risks detailed from time to time in the Company's SEC
reports, including the report on Form 10-K for the year ended September 28,
1997 and most recent Form 10-Q.
###
QUALCOMM, OmniTRACS and Eudora are registered trademarks of QUALCOMM
Incorporated. Globalstar is a trademark of Loral QUALCOMM Satellite
Services, Incorporated. cdmaOne is a trademark of the CDMA Development Group. |
