I know this may sound redundant, but news echoing what has been said here already: (You guys are good)
Wednesday September 1, 12:08 pm Eastern Time
Qualcomm stock tumbles after analyst report
NEW YORK, Sept 1 (Reuters) - Shares of Qualcomm Inc. slipped 9 percent in heavy trading Wednesday morning after an analyst at Everen Securities said the wireless communications company will meet his fourth quarter profit goals but will not dramatically exceed them as it has done in prior quarters.
Qualcomm shares fell as low as 170, down more than 22 points, in early trade to lead the list of net losers on the Nasdaq Stock Market. Around noon it was off 17-7/16, or about 9 percent, at 174-3/4.
While off their 52-week high of 198-5/8, the shares are still far above their year low of 18-7/8.
Company officials were not immediately available to comment.
Everen Securities' analyst Mark Roberts said Qualcomm is well positioned to meet his fourth quarter estimate but that the tightness in component supplies and price erosion in the handset business may limit the degree to which the company can better his target.
``We do not expect the company to dramatically outperform expectations in the coming quarter, which may be perceived as a disappointment to some marginal investors,' Roberts said in the report, which followed a meeting between Everen and Qualcomm management.
Rick Berry, an analyst with J.P. Turner & Co., said the fall Qualcomm's stock price is small compared with the steady upward swing it has experienced over the last year.
``The stock has had an incredible run this year,' he said. ``It's down on the day or so but considering the stock is up on the year, this is just a little blip on the radar screen.'
Berry also noted that the stock's volatility is probably due to investors reacting to the Everen report.
``I think it's just people hearing some of the comments about operating margins and decidedly beating the fourth quarter earnings as they have in the past' Berry said.
Everen pegs Qualcomm at earnings of $0.88 a share in the fourth quarter. That is a penny above Wall Street's consensus estimate, according to First Call/Thomson Financial.
Everen's Roberts reiterated its buy rating on the stock.
``The business model appears intact and we expect sequential revenue and earnings growth in the fourth quarter,' Roberts said.
But he noted that operating margins in the handset business are not increasing as management had hoped because of a quickening price erosion and that tightness in component supplies appears to be intensifying and constraining growth. |
