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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 176.90+0.5%9:44 AM EST
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To: David E. Taylor who wrote (114718)2/28/2002 12:14:24 PM
From: Keith Feral  Read Replies (1) of 152472
 
All this is great. How will you begin to account for the fact that Qualcomm may have the cash to start stock repurchase program? With $2.4 billion in cash right now and $500 to $750 million in net income this year, that would give them over $3 billion in cash. Since they have chosen to exclude QSI from pro forma, there would be no impact on earnings if they choose to start a stock repurchase program.

Consider the fact that Qualcomm could generate over $1 billion in net income in FY 2003. That would leave them with over $4 billion in cash by the end of next year. It would be very easy for them to establish a long term stock repurchase program and still build their cash reserves on an ongoing basis. There is no reason to leave $4 billion in cash.

Options have been around forever without inhibiting the earnings growth of gorilla stocks like CSCO, MSFT, and INTC. Qualcomm is on the verge of long term financial growth that would enable them to develop the same stock repurchase programs that other big cap growth stocks have used.

Qualcomm has an excellent balance sheet of cash and assets, with very few requirements for current funding. The only question now is what Qualcomm is going to do with all of their net income. I think Qualcomm now has the financial stability to take their business to the next level and start stock repurchase programs.
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