Mucho:
Apples:apples, oranges:oranges.
You can't just yank a couple of numbers from somewhere and say "see?" IMO, you need to look at trends over time to get a better picture of how things have gone and some idea of the likely future direction of things. Plus I long ago gave up trying to reconcile reported financial stuff from different web sites (who knows how they get some of these numbers?), preferring instead to dredge through the SEC filings.
But just comparing Hoovers:Hoovers for Q's ending:
12/01 9/01 6/01 3/01 12/00
QCOM Operating Margin 26.1% 17.9% 20.4% 28.4% 23.2%
NOK Operating Margin 9.1% 14.2% 11.7% 17.1% 18.7%
QCOM Net Profit Margin 19.9% -- -- 20.9% --
NOK Net Profit Margin 4.1% 2.6% 8.0% 12.2% 13.0%
QCOM Diluted EPS 0.17 (0.26) (0.36) 0.18 (0.31)
NOK Diluted EPS 0.04 0.04 0.10 0.18 0.27
We could list other metrics from Hoovers like cash/share, book value (assets - liabilities)/share, etc, and QCOM would look much better than NOK on each, but the sample above tells the two stories.
And kind of illustrates what has been happening to QCOM's basic business of royalties and chipset sales - pretty steady performance through some troubling times if you can get by those pesky "one time items" which turn impressive operating results into "net losses", and - usual drum roll please - with a major, steady growth period coming over the next several years to boot, and hopefully an end to the write offs.
It also kind of illustrates what has been happening to NOK's basic business of selling handsets and infrastructure equipment - "growth" slowly grinding to a halt due to stagnating/declining demand for new stuff of the GSM/GPRS type, designer faceplates and other goodies notwithstanding. With NOK having trouble selling CDMA IS 95A/1x (and soon EV DO), and 3G of the WCDMA/UMTS/3GSM variety still 2-3 years away in terms of volume shipments, it doesn't look like things will improve for them any time soon. $10/share soon and a good short IMO.
Hoovers QCOM link:
hoovers.com
Hoovers NOK link:
hoovers.com
Disclosures:
(1) I have a biggish long position in QCOM (established at various prices ranging from the mid-$50's in July 2000, mid $40's Apr/Oct 2001, and more recently, mid-$30's), and will likely increase it some more soon (like the morning after the imminent earnings) since I believe we are again close to a bottom. I'll also confess to some (much smaller) swing trading and call option buying over the last two years, with OK but not spectacular results - certainly not enough to offset the overall decline in value of the basic biggish position.
(2) I have a smallish short position in NOK taken in January 2002 in the mid $20's, and may soon boost it too, since I believe it's headed for around $10. Wish I'd done this back in 2000 when I started in QCOM, but short positions are somehow not my style - OK, so you, robv and others can laugh away, maybe I'll get bolder on the short side of things some day.
David T. |
