Keith:
Regarding JS's statement that:
....the company has not managed to accumulate more than 385 M$ in its entire lifetime of operations...
to which you responded:
...this guy JS is talking out of complete ignorance. The company has $2.4 billion in cash and marketable securities. They also have $2.0 billion in investable assets in QSI. They also have $1.0 billion in fixes assets & 0.9 billion in inventory. That is a total of $6.3 billion in total assets.
I think he is getting the $385 million mixed up with Sprint PCS.
I think, no I'm sure, that JS is correct and that you have this wrong. The latest 10Q filed by the company does indeed show "retained earnings" at $384 million, and if you dredge through all the company's SEC filings, you will find that the $384 million number is in fact the sum of all of the net after tax earnings and losses over the public life of the company. That number stood at an all time high of $871 million on 9/30/00, and it was reduced to the present level largely by the $549 million loss in FY 2001, courtesy Globalstar and other "one-time" events.
Those $384 million in retained earnings are what is left (after taxes) of the $17 billion in total revenues earned by the company between 1992 and the present. For those who want to count the cash sunk into R&D, i.e. the cost of generating all that valuable IPR, the cumulative R&D expense stands at just over $2 billion ($2,066,433,000 to be exact).
The other big numbers you note in cash, marketable securities, QSI assets, fixed assets, inventory, etc.?? Yes, they're all still there on the books. Net of the liabilities and other adjustments on the books, they come out to (more or less) the number currently on the balance sheet as "shareholder equity", currently at $5.111 billion.
But that much bigger number has nothing to with the answer to the question "how much has the company made over its lifetime?", which is the aforementioned $384 million, on the aforementioned lifetime $17 billion of revenues.
I would also note that the $384 million of lifetime earnings has little to do with "return on investment" over the lifetime of the company, provided you bought shares at the company's public birth. "Paid in capital" is listed on the balance sheet at $4.862 billion, representing the amount of cash deposited in the company's piggy back in exchange for the present 765 million actual shares, or around $6.36/share. If you are lucky enough to have bought shares at that (average) price, figured over the ten years from 1992, you have a not bad compounded 17.8% annual return, at today's close of $32.70. Of course, if you'd sold at $200 in January 2000, you'd have realized a whopping 54% compounded annual return!
Which I guess is why many people are still LT holders, for the "stock appreciation potential" and not the "past or future earnings counted as paid out dividends" valuation approach favored by MM, JS and others. While there may seem to be big differences of opinion here, it's clear that unless QCOM can grow revenues and translate those revenues into bottom line (GAAP) earnings, the "stock appreciation potential" will remain just that - potential and not real.
David T. |
