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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 173.96+1.4%3:59 PM EST
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To: H. Bradley Toland, Jr. who wrote (125833)12/4/2002 5:06:08 PM
From: hueyone  Read Replies (4) of 152472
 
Lastly, Qualcomm's earnings have gone up about 10 fold in the last 5 or 6 years.

The tables below, with figures taken from the QCOM 10ks, put to rest any notion of a ten fold increase in earnings over the last five years.

Table 1--Column 2 is absolute earnings in millions. Column 3 is absolute earnings in millions adjusted for stock option expense. 


 
                                Gaap Earnings
Fiscal Year   Gaap Earnings     In Millions
Ending        In Millions       Adj for St Options

9/30/97        91.934           73.197

9/30/02        359.677          125.796



But we also had dilution during this period, so the growth in EPS, does not match the growth in absolute earnings. And finally, if we proplerly include stock option expense as both the IASB and FASB have advocated at one time or another, the entire EPS growth over the five year period is a measly 23%.

Table 2--Column 2 is GAAP EPS adjusted for splits, Column 3 is GAAP EPS adjusted for splits and stock option expense: 



Fiscal Year                     GAAP EPS
Ending           GAAP EPS       Adj. for St. Option 

9/30/97          .16             .13

9/30/02          .44             .16



Qualcomm's performance over the last five years does not entail a 10 fold increase in earnings by any stretch of the imagination. Perhaps the figures would look better if I went back six years, but we hardly have any evidence from a past trend that might indicate that investors could expect (another) five to ten fold of earnings going forward over the next eight to ten years as your post implies.

Best, Huey
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