Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 157.05

+1.9%

3:22 PM EST

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To: Didi who wrote (75805)	7/8/2000 2:32:08 AM
From: Jacob Snyder	Read Replies (2) of 152472

Company: QUALCOMM Inc. Price: 57.25 Recommendation: Market Perform Notes: a, f Chase H&Q Date: 7/7/00 QCOM: Technology faces uncertain future in Korea. MARKET PERFORM. * Two of Korea's largest mobile operators (55% of Korea subscribers) plan to adopt W-CDMA technology for their 3G networks instead of Qualcomm's cdma2000 solution. * This development is consistent with our thesis that Qualcomm is fighting an uphill battle with its 3rd generation technology. More than 70% of the world's wireless subscribers currently use GSM and TDMA, both of which are upgrading to W-CDMA -- the European 3G standard. * We believe Qualcomm's net royalty position is markedly weaker in W-CDMA than cdma2000 (its 3G solution) and that the company will reap a much lower royalty rate from W-CDMA. * Short term: We expect the June 1 ban on Korean handset subsidies will negatively impact chipset sales and royalty revenue in the near term. In June, mobile phones sales were down 77% month-to-month in Korea. * Medium term: We believe the likely demise of Globalstar will be a psychological drag on the stock as well as impact its FY 2001 earnings by approximately $(0.10). * Long term: The decision in Korea to use W-CDMA over Qualcomm's cdma2000 technology we believe is a prelude to similar decisions in Japan and possibly even the US and will negatively impact long-term revenue and earnings growth for Qualcomm. * Given the lack of foreseeable positive catalysts, we expect cautious guidance and outlook on the July 19th conference call. Reiterate MARKET PERFORM. * 1999 A 2000 E 2001 E Q1 EPS $0.08 $0.25 $0.28 Q2 EPS 0.10 0.26 0.31 Q3 EPS 0.19 0.29 0.33 Q4 EPS 0.23 0.28 0.36 FY EPS 0.60 1.07 1.27 FY REVS (M) 3,936 3,270 3,456 CY EPS 0.76 1.11 1.37 CY P/E 75x 52x 42x FY Ends Sep Current Price $57.25 52-Week Range $33-200 Market Cap (M) $45,877 Shares Out (000) 801,338 Book Value $6.81 Net Cash/Share $2.13 3-Year EPS Growth 34% CY01 P/E-to-Growth 124%

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