Alex Cena's earnings preview on QCOM>
QUALCOMM (1H)*. Results Due April 18, After the Close
Pro forma EPS (excluding handset division) should be in line with
consensus of $0.24 and compared with estimated pro forma EPS of $0.13 a
year ago.
Sales of CDMA ASICs should be up 32% year over year and down slightly
(12%) sequentially.
Royalties should be up 55% to $158 million versus $94.5 million last year
and down slightly (4%) sequentially. However, excluding intercompany
eliminations, royalties should be up sequentially as well.
We estimate pro forma gross margin and operating margin for the fiscal
second quarter of 2000 of 64.8% and 44.2%, respectively.
Focus for the quarter should be on the ASIC book to bill, which is
expected to be >1.0, and the general tone of the business, which is
expected to be upbeat.
Incremental news flow should be upbeat since in line quarter is already
in the stock.
We believe that all is on track for QUALCOMM to be in line with consensus
and in line with management's guidance earlier in the quarter. The most
important issues in the quarter on which to focus are the ASIC book to
bill, which is expected to be greater than 1.0, and the general tone of
business, which is expected to be upbeat.
We estimate that pro forma fiscal second quarter 2000 EPS should be $0.24
versus $0.13 reported last year (on a pro forma basis), and compared with
consensus of $0.24. Both ASIC sales and royalty fees should be up
slightly year over year but down slightly sequentially. We estimate ASIC
sales to increase 32% year over year to $310 million and to decrease by
12% sequentially. Royalties are estimated to increase by 55% year over
year to $158 million and to decrease by 4% sequentially. Pro forma gross
margin and operating margin for the quarter should be 64.8% and 44.2%,
respectively.
* The historical pro forma results mentioned are our estimates, because
the company has not yet reported its results to reflect the recent sale
of its handset division. |
