Qualcomm higher as analysts bullish over prospects despite weak Q3
AFX News UK, 1/25/2002 11:41:00 AM
SAN FRANCISCO, Jan 25, 2002 (AFX-UK via COMTEX) -- Shares in Qualcomm Inc were higher midsession as investors shrugged off last night's profit warning from the wireless technology group and as analysts remained bullish on the firm's long-term prospects, dealers said.
At 11.33 am, Qualcomm was up 0.08 usd at 43.77, while the Nasdaq composite was down 11.44 points at 1,931.14.
"While the estimate revision is disappointing, we believe the long-term picture remains intact," said Lehman Brother analyst Tim Luke.
As it reported second-quarter results that matched expectations, the company warned "continued weak global economic conditions are moderating our March quarter outlook."
It said second quarter to March EPS would come in at 19-21 cents a share on sales which will fall 3 to 6 pct compared to the previous quarter.
For the full year, it forecast EPS of 90 to 97 cents a share on sales which are seen rising 5-10 pct on the previous year.
According to Thomson Financial/First Call forecasts, the company is expected to earn 24 cents a share in the first quarter and 1.08 usd a share on sales of 3.046 bln usd for the full year.
The company, which gains revenues by licencing its CDMA mobile phone technology to telecommunication firms, has had to peg back sales projections as demand for new internet-ready wireless devices has fallen below expectations due to the slowdown in the economy.
But according to Lehman's Luke, demand for CDMA-based handsets is sure to pick up over the next year or so.
"In general, we remain encouraged by the progress of the roll-out in Korea with 410,000 new users in December and our recent checks suggest that both (US mobile phone carriers) Sprint and Verizon are likely to be aggressive in rolling out new CDMA services over the several months."
Luke re-iterated his 'strong buy' rating on the stock but lowered his price target to to 50 to 55 usd from 65 usd.
US Bancorp Piper Jaffray re-iterated its 'market outperform' rating on the company, saying it expects Qualcomm "to get back on track in H2 2002".
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