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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: mishedlo who wrote (65691)2/7/2001 11:50:19 PM
From: mishedlo  Read Replies (1) of 436258
 
The following snippet is from sellreport who also doubts QCOM's revenue growth.
Despite the revenue shortfall from GLOBALSTAR and
Omnitracs, the company was able to beat the analysts' consensus of $0.28 by one penny. But some onetime occurrences allowed it to do so:

1.The company reported a $15 million equity gain
in one of its outside investments.
2.It was able to lower its affected tax rate to
35% from 37% because a greater percentage
of its business came from countries that had lower tax
rates compared to last year's business.

Also, in its business, which licenses the CDMA technology to network service providers, the
company was able to collect on several onetime
up-front license fees from cell phone companies
that bought the operating system to build out their 3G
(the "third generation" wireless broadband technology). While the company will eventually
collect revenue from these companies as it starts to sell the 3G devices, the onetime only licensee fees
should go down for a few quarters until the phones are being sold to consumers. The market always values the phone license revenue higher than the onetime-only fees because it is more likely to be repeat revenue. Yet with declining handset sales, and the constrained capital markets, the company will probably not see substantial 3G phone license revenue for quite some time.

So the company finds itself in a difficult
position. It must grow its first generation CDMA product in order to justify its obscene 70 P/E ratio while hoping that its service providers roll out the 3G product as quickly as possible. But judging from
recent results at MOTOROLA (MOT), L.M. ERICSSON TELEPHONE (ERICY), AT&T WIRELESS (AWE) and
others, it seems clear that the first generation cell phone networks are reaching a peak in popularity
and the 3G phones are still a bit off in the future.

M
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