Thursday, June 15
"SHARES OF QUALCOMM (QCOM) WERE UNDER PRESSURE YESTERDAY AFTER THE
CFO SPOKE AT A BEAR STEARNS CONFERENCE. THE ISSUE OF SOUTH KOREA
ELIMINATING HANDSET SUBSIDIES IS OLD NEWS. IN FACT, DESPITE THE
DISCONTINUATION OF SUBSIDIES, WHICH COULD PRODUCE SOME TEMPORARY
SOFTNESS, THE ECONOMY IN KOREA IS MUCH STRONGER THAN A COUPLE OF YEARS
AGO AND THERE IS MORE DISPOSABLE INCOME AVAILABLE. ALSO, THE STRENGTH IN
CDMA WORLDWIDE COULD ALSO OFFSET ANY TEMPORARY WEAKNESS IN KOREA..
OF MORE CONCERN WAS THE IMPACT OF GLOBALSTAR (GSTRF) ON QCOM'S EARNINGS. WE
HAVE DO NOT HAVE ANY REVENUES FROM GSTRF IN OUR MODELS AND MAINTAIN OUR 2001
EPS OF $1.45.
WHAT APPEARS TO HAVE CONFUSED INVESTORS WAS WHEN THE CFO OF QCOM
SAID THAT SHOULD GSTRF'S BUSINESS PICK UP, THERE COULD BE A $0.10 IMPACT
TO EARNINGS. THE $0.10 THE CFO WAS REFERRING TO WAS POSSIBLE EARNINGS
UPSIDE AND NOT A POTENTIAL $0.10 SHORTFALL. FINALLY, THE TIMING OF CDMA IN
CHINA HAS ALWAYS BEEN A QUESTION MARK DUE TO THE COMPLEX CONTEXT OF THAT
MARKET. AGAIN, CHINA IS ALSO NOT IN OUR NUMBERS. WE REITERATE, OUR
UNCHANGED 2001 EPS ESTIMATE OF $1.45 AND WOULD BE BUYERS ON THE
WEAKNESS FOR AGGRESSIVE INVESTORS."
ANDREW BARRETT, MARK FENTON, JAMES CHOI, ANDREW ST. PIERRE
TECH/TELCO, STRATEGY - SALOMON SMITH BARNEY |
