Qualcomm Up 7%; First Union, Deutsche
Banc Issue Notes
Dow Jones Newswires
By Desiree Hanford
ST. LOUIS -- Shares of Qualcomm Inc. (QCOM) pushed higher Friday
after two analysts published research notes that were more upbeat than at
least one other published this week.
The stock recently traded at 65 11/16, up 4 1/4, or 6.9%, on volume of
20.9 million shares, compared with a daily average of 21.2 million.
A Qualcomm spokeswoman said the San Diego company doesn't
comment on its stock movement.
First Union Securities Inc. analyst Mark Roberts issued a bullish report to
the firm's institutional clients Thursday morning, but he said retail investors
didn't get word of it until Friday.
Roberts said he wanted investors to know where he stood on Qualcomm
and the global demand for code division multiple access, or CDMA,
handsets, particularly after another analyst made some bearish comments
about the company and reduced his earnings estimates on Thursday.
Based on discussions he's had with Qualcomm and Korean manufacturers,
Roberts said he can't find any evidence of a slowdown in the global
demand for CDMA handsets. He noted that those manufacturers expect
that as the Korean market slows down, the manufacturing capacity that's
freed up will be used to make phones for export to other markets, mainly
North America and Latin America.
"That's contrary to what a number of our competitors are saying," Roberts
said.
Qualcomm will receive the same royalty rate regardless of which version of
third-generation technology - the company's or another - carriers select, he
said.
There will be CDMA in China, Roberts said, and it's a matter of when -
not if - that will occur.
Qualcomm said at a conference this week that the Korean government's
decision to cease handset subsidies could have an impact on demand in
Asia. The company also said prospects in China are uncertain.
Deutsche Banc Alex. Brown analyst Brian T. Modoff said in a research
note Friday that uncertainty about the potential impact of the Korean
subsidy termination and other recent events, such as delays in China, are
weighing on Qualcomm's stock.
Still, Modoff thinks the company is in good shape to benefit from the
pending carrier upgrades to 1XRTT technology. In addition, Modoff said
that his model shows an accelerating revenue and earnings trend going into
2002, as carriers begin the buildout of wideband code division multiple
access, or WCDMA, networks in Europe.
Modoff said he views the current share price weakness of Qualcomm as
an opportunity to buy the stock, and he maintained his strong buy rating on
it.
-Desiree J. Hanford, Dow Jones Newswires, 314-588-8443
Briefing Book for: QCOM |
