Qualcomm shares up on bullish outlook - analysts
<<"No one has really liked (Qualcomm's stock) that much, except for a couple people," >>
--From AOL. "A Couple People" LOL! -- Cooters
CHICAGO, Jan 26 (Reuters) - Wireless technology company Qualcomm Inc.'s <QCOM.O> stock gained more than 8 percent on Friday as analysts and fund managers said investors viewed the San Diego firm's bullish forecasts for its mobile telephone technology positively.
"The company was very bullish about the strength of the CDMA market and specific commentary on orders is probably what investors are reacting to," Wit SoundView analyst Matt Hoffman said of Qualcomm's Code Division Multiple Access mobile phone technology.
Qualcomm stock was up 8.54 percent, or $6-5/16, at $80-1/4 a share in Nasdaq trading. The stock has fallen by about half from its peak of $162-9/16 in April 2000.
During a conference call after Qualcomm announced fiscal first-quarter earnings, Chairman and Chief Executive Irwin Jacobs said demand was strong and still growing for the company's CDMA phone technology.
"We anticipate further growth domestically and internationally during fiscal 2001, with increasing focus on third-generation CDMA deployment," he said.
The CDMA technology, Qualcomm's proprietary wireless technology that competes with two other global standards, is fast becoming a standard in the wireless industry. Rivals include the GSM (global system for mobile communications) standard promoted by European firms.
Qualcomm said it expects 90 million CDMA phones to be sold worldwide in 2001 and average selling prices will decline by 20 percent. It also expressed support for current analyst estimates for pro forma second-quarter earnings of 29 cents a share, as well as full-year 2001 estimates of $1.27 a share.
The San Diego-based company receives royalties based on the prices of CDMA devices, so lower prices mean lower royalties. However, company officials said price declines have been offset by the growth in unit sales.
"There's been mostly negative news from Wall Street coming out on Qualcomm," said Alan Loewenstein, portfolio co-manager of the $2 billion John Hancock Technology Fund, which holds more than 500,000 Qualcomm shares.
"No one has really liked (Qualcomm's stock) that much, except for a couple people," he added. "Them posting a little bit better than expected number last night and not backing off the forecast for the first quarter 2001 gave people a pause and they said, 'Maybe things aren't as bad as we thought.'"
Qualcomm reported pro forma net income of $231.6 million, or 29 cents a share, versus $209.6 million, or 27 cents per share, in the year-ago quarter. The results topped Wall Street's forecast of 28 cents a share, according to research firm First Call/Thomson Financial.
Deutsche Banc Alex. Brown analyst Brian Modoff on Friday raised his target price for the stock by $5 to $105, based on the bullish comments and quarterly results. He also raised estimates for the second quarter, as well as for the full 2001 and 2002 fiscal years.
Not everyone was convinced by Qualcomm's positive outlook, however.
Wit SoundView's Hoffman, who rates Qualcomm's stock a hold, said the quarterly results were in line, but he remains cautious Qualcomm's fiscal second- and third-quarter orders could still be soft.
"We'll see who's right," he said. "They think the market's going to be good. I think it's going to be a little less good."
15:28 01-26-01 |
