Qualcomm
Third quarter profits at Qualcomm should be 225 percent above those of the same
period of a year ago, says George Rho of Value Line.
For the full year, which ended Sept. 30, the net should rise by 178 percent, the analyst
says. "The company's growth is being fueled by spectacular growth in (code division
multiple access) subscriber rolls, which is driving both royalty income and
high-margined applications specific integrated circuit sales," Rho says.
The company is looking to sell its terrestrial-based phone business, Rho says.
"Although volume is ramping up," Rho says handset business is being hurt by
oversupply, Asian-induced price declines and squeezed profit margins.
Rho doubts the situation will clear up soon, so the decision to sell is a good one.
However, the company will book a loss in the first quarter because of the sale, the
analyst says.
He sees continued strong growth for Qualcomm from 2002 through 2004. The stock gets
Value Line's highest (1) rating for timeliness, but a below average (4) for safety.
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