WSJ>
July 20, 1999
Dow Jones Newswires
Qualcomm CFO: Use 86c/Shr As Basis For 4Q
Net Views
By Tom Locke
DENVER -- Despite shortages in components for its wireless phones,
Qualcomm Inc. (QCOM) expects sequential growth in its phones production in
the fourth quarter as well as growth in overall earnings, according to executives
speaking in a conference call with analysts late Monday.
Chief Financial Officer Anthony Thornley said that analysts should use
Qualcomm's third-quarter pro forma earnings-per-share number of 86 cents as a
"basis for assessing fourth quarter performance."
That would mean an upward revision from the First Call fourth-quarter
consensus estimate of 69 cents per share. A year ago, Qualcomm reported
fiscal fourth quarter earnings per share of 27 cents.
The pro forma number is what Qualcomm would have reported for its fiscal
third quarter ending June 27 excluding both one-time charges and operating
results relating to its terrestrial code division multiple access, or CDMA, wireless
infrastructure business, which concentrates on cell site equipment.
The San Diego maker of wireless telephone products sold that business to L. M.
Ericsson Telephone Co. (ERICY) in a deal that closed in late May.
Thornley declined to address one analyst's assumption that estimates for 2000
might be made by annualizing the 86 cents, but he did warn that the company's
tax rate will increase next year and other factors may change. Based on the 86
cents, the annualized 2000 earnings-per share number would be $3.44, 23%
higher than the First Call consensus of $2.79 per share for 2000.
Qualcomm Chief Operating Officer Richard Sulpizio said in the conference call
that Qualcomm's third-quarter shipments of CDMA phone units, which totaled
about 1.7 million, would have been larger but for shortages of components.
He said the shortages were in a number of components "across the board" that
affected a variety of Qualcomm wireless phones, including its new thin phone.
He said he expects those problems to last another three to six months, but he still
expects sequential growth in units produced.
"Our plans for the fourth quarter are still to produce more than we did in the
third quarter," he said.
Thornley attributed the quarter's strength to a number of areas, including sales of
CDMA phones, sales of integrated circuits used in CDMA phones, and royalties
paid on its CDMA technology.
Excluding non-recurring charges, Qualcomm reported fiscal third quarter
earnings-per-share of 75 cents on revenue of $1 billion. Revenue was up 15%
over a year ago.
Earnings per share were 19% higher than the First Call consensus estimate of
63 cents and 341% higher than the 17 cents reported a year ago.
The 75 cents in earnings per share excludes $117 million, or 40 cents a share, in
one-time charges associated mainly with the sale of Qualcomm's terrestrial
wireless infrastructure business.
Qualcomm shares closed Monday up 7/16, or 0.3%, at 158 11/16. Including the
effect of a two-for-one stock split in May, the shares are up 513% this year.
Volpe Brown Whelan analyst Pete Peterson said he expects to see analysts
revise their Qualcomm estimates for 2000 upward to a consensus of about
$3.20 in earnings per share because of the company's upside third-quarter
results. That would be a 15% increase compared with the First Call consensus
of $2.79.
Peterson said there might be some selling pressure on the stock for part of the
day Tuesday, citing the component shortages. But he expects significant
revisions upward in analysts' estimates, and "the stock should continue on its
upward path," he said.
While CDMA phones account for about 45% of Qualcomm's business, Peterson
said he doesn't expect the component shortages for its phones to have much of
an impact on Qualcomm. The company has indicated that it will be able to meet
its goal of producing 1 million phones a month by the end of the year, up from
850,000 phones a month now, Peterson said.
That's partly because the increase in units is relatively small for the component
suppliers, he said.
Peterson said CDMA phone units are growing at a compounded annual growth
rate of 60%, and he is estimating Qualcomm earnings-per-share growth of
more than 50% a year into 2000.
-By Tom Locke; 303-293-9294
By Tom Locke
(This repeats a story originally published late Monday.)
DENVER (Dow Jones)--Despite shortages in components for its wireless
phones, Qualcomm Inc. (QCOM) expects sequential growth in its phones
production in the fourth quarter as well as growth in overall earnings, according
to executives speaking in a conference call with analysts late Monday.
Chief Financial Officer Anthony Thornley said that analysts should use
Qualcomm's third-quarter pro forma earnings-per-share number of 86 cents as a
"basis for assessing fourth quarter performance."
That would mean an upward revision from the First Call fourth-quarter
consensus estimate of 69 cents per share. A year ago, Qualcomm reported
fiscal fourth quarter earnings per share of 27 cents.
The pro forma number is what Qualcomm would have reported for its fiscal
third quarter ending June 27 excluding both one-time charges and operating
results relating to its terrestrial code division multiple access, or CDMA, wireless
infrastructure business, which concentrates on cell site equipment.
The San Diego maker of wireless telephone products sold that business to L. M.
Ericsson Telephone Co. (ERICY) in a deal that closed in late May.
Thornley declined to address one analyst's assumption that estimates for 2000
might be made by annualizing the 86 cents, but he did warn that the company's
tax rate will increase next year and other factors may change. Based on the 86
cents, the annualized 2000 earnings-per share number would be $3.44, 23%
higher than the First Call consensus of $2.79 per share for 2000.
Qualcomm Chief Operating Officer Richard Sulpizio said in the conference call
that Qualcomm's third-quarter shipments of CDMA phone units, which totaled
about 1.7 million, would have been larger but for shortages of components.
He said the shortages were in a number of components "across the board" that
affected a variety of Qualcomm wireless phones, including its new thin phone.
He said he expects those problems to last another three to six months, but he still
expects sequential growth in units produced.
"Our plans for the fourth quarter are still to produce more than we did in the
third quarter," he said.
Thornley attributed the quarter's strength to a number of areas, including sales of
CDMA phones, sales of integrated circuits used in CDMA phones, and royalties
paid on its CDMA technology.
Excluding non-recurring charges, Qualcomm reported fiscal third quarter
earnings-per-share of 75 cents on revenue of $1 billion. Revenue was up 15%
over a year ago.
Earnings per share were 19% higher than the First Call consensus estimate of
63 cents and 341% higher than the 17 cents reported a year ago.
The 75 cents in earnings per share excludes $117 million, or 40 cents a share, in
one-time charges associated mainly with the sale of Qualcomm's terrestrial
wireless infrastructure business.
Qualcomm shares closed Monday up 7/16, or 0.3%, at 158 11/16. Including the
effect of a two-for-one stock split in May, the shares are up 513% this year.
Volpe Brown Whelan analyst Pete Peterson said he expects to see analysts
revise their Qualcomm estimates for 2000 upward to a consensus of about
$3.20 in earnings per share because of the company's upside third-quarter
results. That would be a 15% increase compared with the First Call consensus
of $2.79.
Peterson said there might be some selling pressure on the stock for part of the
day Tuesday, citing the component shortages. But he expects significant
revisions upward in analysts' estimates, and "the stock should continue on its
upward path," he said.
While CDMA phones account for about 45% of Qualcomm's business, Peterson
said he doesn't expect the component shortages for its phones to have much of
an impact on Qualcomm. The company has indicated that it will be able to meet
its goal of producing 1 million phones a month by the end of the year, up from
850,000 phones a month now, Peterson said.
That's partly because the increase in units is relatively small for the component
suppliers, he said.
Peterson said CDMA phone units are growing at a compounded annual growth
rate of 60%, and he is estimating Qualcomm earnings-per-share growth of
more than 50% a year into 2000.
-By Tom Locke; 303-293-9294 |
