Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 151.59

-0.4%

Jan 30 9:30 AM EST

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To: JohnG who wrote (35278)	7/16/1999 1:50:00 PM
From: Ruffian	Read Replies (1) of 152472

Sawtek Inc. (SAWS) 64 1/4 +5 1/2: Shares of supplier of electronic signal processing components are being rewarded today after the company posted better-than-expected fiscal Q3 results last night. The company earned $0.38 a share, four cents better than the First Call estimate, and 18.8% ahead of year-ago profits. Meanwhile, revenues for the quarter were up 10.6% on a sequential basis, but down 1.1% on a year-over-year basis. However, worldwide demand for both base station and handset filters based on CDMA technology have continued to be strong as international sales improved in the quarter due to purchases from South Korean customers which now make up 17% of the company's total sales. The company is also planning an aggressive ramp-up of production capabilities to meet increasing demand and which makes the company's long-term prospects much improved. The latest earnings news has not been lost on investors as they have continued to bid the stock up even though the stock has risen more than 186% since March and 329% since last October. At the same time, the stock is getting an upward push today from USB Piper Jaffray as the firm upgraded the stock from a "buy" to "strong buy" and also increased earnings estimates. The firm upped FY99 EPS estimate from $1.34 to $1.39 and FY00 EPS from $1.47 to $1.67 per share. With the more optimistic earnings outlook, SAWS shares are now trading at 38 times projected FY00 earnings which leaves little room for error since in the past year, sales have been expanding by around 15%, while profits have grown by 25%. If the company can get back to its longer-term sales and earnings growth rates of 44% and 56%, respectively, then it should have little problem justifying its lofty stock price. Otherwise, it could be a long drop before valuations again line up with current growth trends. - RN

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