messages.finance.yahoo.com
Key Take Aways (10 Ratings)
tellijent, 25-Oct-07 07:18 pm
-Qualcomm is not going to be a competitor with Gobi. They will still utilize their customers such as SWIR to reach end user as they do with their current chips.
-Their $125m rev guidance already takes into account supplier component constraints. However, there is possible improvement to be had with supply issues which will potentially improve overall revenue. This, however, is a good problem to have - Your suppliers can't keep up because of the increased demand for your products. - This is not just a SWIR problem but it is an industry problem. This is a high growth industry.
-They improved gross margins to 29.7% and operating margins to 10.4%. This is outstanding especially considering they were at 27/7.6% last quarter.
-They are going to launch additional HSUPA products with AT&T. I know this will include the USB, but why did Jason say product(s)? This may just include embedded modules, but it may include ExpressCards which will be great considering that AT&T does not currently carry our ExpressCards.
-Spreading M2M to Europe and Latin America in 2008. This is key because it is currently only in North America. These are also high margin products. Growth in this portion of the business can have huge impacts on future earnings.
-They are working on a new USB product that will go beyond simply memory storage functionality and it will be smaller. This will be released in late Q1/early Q2. Should be interesting!!!
-AT&T/Sprint/Verizon were all at least 10% customers, but totaled only 51% of total revenue. This was a significant improvement over Q2. Less customer concentration is great!!!
-They expect as many if not more operators to utilize their HSUPA products as do their HSDPA products
-They are looking at potential M&A activity (probably in M2M). M2M is high margin, so this will be great. Jason mentioned that their M&A strategy is more organized than it's ever been. They did a good job with Airlink, let's hope for more of the same.
-They did well in Asia this qtr. Jason has met with a number of operators in Japan, and they see great growth opportunities there.
-ASP's have remained flat over the past year which indicates that they are handling competition and pricing pressures very well.
-The US dollar woes aren't having a tremendous effect on SWIR. This is good because these trends may continue.
-ETC. ETC. ETC.
Folks, none of the analysts expected a quarter or guidance this good. Not even the ones who bought 3.8 million shares at $22.40 expected this. The highest estimate for Q3 was $0.29 and $0.33 for Q4 (and Q4 expectations numbers were pre bought deal). This CC confirmed that Q4 is going to be great, but 2008 has a lot of things on the table including:
-Expansion of our high margin M2M business into Europe and Latin America
-Innovative USB products introduced at carriers in Q1/Q2
-Potential M&A activity (if not before 2008)
-New Gobi opportunities in 2H of 2008
-HSUPA Plus products to be introduced sometime next year.
-Strong Growth throughout the industry.
-New Wimax products
Like I said before: TO THE MOON, BABY!!! TO THE MOON!!!
I must say that Jason did an outstanding job. You would be foolish to unload your stock here. We should double from her in the next six months.
Take care,
Brandon |
