Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 174.54

-1.2%

Nov 13 3:59 PM EST

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To: Uncle Frank who wrote (103572)	9/2/2001 4:59:39 PM
From: Stock Farmer	Read Replies (1) of 152472

Hi UF I was describing 4 year earnings growth of about 5x with my chain-saw precision. You suggest my estimate suffers a lack of relevance to the current Q's actual performance because of discontinued operations. Perhaps. Let's do the detailed math and see what we get. Forget pro forma, I'll even go better than that, using Q's own SEC sanctioned inter-segment information. Seems like they anticipated folks would like to know the details "sans discontinuation" too. Good for us because we can be accurate to six significant figures if you'd like. Hmmm... according to 2000 10-K Note 16 to consolidated financial statements, 1998 EBT of QTL (best performing segment and the one responsible for all that valuable IP) was 256,401 M$. 2000 EBT of QTL was 633,336. That's growth of 2.470010 in 3 years. But we were talking 4 years. From the latest 10-Q, QTL's 9 month EBT for 2001 is running 1.21211 x 2000 9 month EBT which gives estimated 2001 EBT of 767,675 M$. That's a 4 year growth of 2.99405 times. Give or take some rounding in the last few digits. Which is slightly less than the 5x I estimated. The business can't grow EBT faster than the fastest growing segment (the three reported continuing segments add up to 2.396538) So without dredging up 4 years of pro-forma press releases (let this muck lie where it belongs) I can pretty well safely say that Q's earnings have grown by less than 5x. With a degree of precision that errs in Q's favor. The extra precision hardly benefits anyone because I was comparing 5x with 100x, so perhaps I'm off by 2 (ish) in a direction that merely strengthens the point I was making. One is very very very much bigger than the other, and the precise degree of "by how much" doesn't seem to matter. John.

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