Smith Barney>
SSB reports (Nok and QCOM)
by: ToHellWithCDMA (32/M)
8929 of 8930
QUALCOMM (QCOM,1-H,$142 1/4) RESULTS DUE JULY 20, AFTER THE
CLOSE.
* EPS should be at least $0.67 vs. consensus of $0.63
* Sales of CDMA ASICs (+81.2% YOY) & mobile phones (+11.7% YOY) should
be robust
* Revenue, ex royalties, should be up 15% YOY
* Royalties from other CDMA mfrs should be $86 mm. vs $47 mm. last year
* We estimate gross & operating margins for F3Q99 of 31.0% & 9.9%,
respectively.
We believe Qualcomm's EPS for F3Q99 could exceed our estimate of $0.67 due to
continued strength in (1) mobile phones, (2) ASICs chipsets,
and (3) royalty fees. We estimate F3Q99 EPS should be $0.67 vs. $0.14 reported last
year and compared to consensus of $0.63. Revenue,
excluding licensing and royalty fees, in our opinion, should increase 15% to about $951
million from $828.6 million a year ago. Licensing and
royalty fees, which represent pure profits, are estimated at $86.2 million for the quarter
vs. $47 million a year ago. Licensing and development
fees now reflect the on-going growth in royalties from the CDMA marketplace as
opposed to last year when this line item not only included
royalties from manufacturers but also one time payments from manufacturers interested
in entering the CDMA market. Qualcomm has now
licensed virtually every manufacturer, including all the major vendors such as Ericsson,
Lucent Technologies, Motorola and Nokia. Thus, licensing
and development fees now largely reflect royalties received from manufacturers of
CDMA infrastructure and cell phones. Gross and operating
margin for the quarter should be 31.0% and 9.9%, respectively, vs. 24.6% and 0.8% a
year ago. Moreover, we believe that Qualcomm is fast
becoming synamous with the wireless Internet since 3rd generation wireless networks,
which are likely include intellectual proporty rights
associated with Qualcomm, are being optimized for data applications and the Internet.
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