Maurice:
First...the $100mm per quarter number is just flat-out incorrect, try $100mm to $150mm per annum.
Second...what happened to infrastructure? Well, the Russian "Federation" has for the time being self-immolated and the Ukraine is only marginally better off. Probably more important, from a near-term perspective, is a slowdown (not a stoppage mind you) of the Pegaso network deployment due to financing difficulties.
I am surprised by your consternation. Did you forget that the company delayed recognition of $29mm in Russian infrastructure sales? Qualcomm's conservative guidance subsequent to the September conference call was directly the result of the aforementioned infrastructure issues, so a conservative estimation of these infrastructure "problems" are already baked into this year's business and the Street's estimates.
You seem to have the analysis backwards. From my perspective, anything the company does to reduce the infrastructure drag, i.e. sale, JV, OEM agreement or something else, will be additive to 1999 operating earnings. Subsequent to whatever happens, the Street will most likely (a) need to adjust EPS estimates northward and (b) be relieved of a significant current uncertainty.
As I pointed out in my prior update, Irwin & Company seemed to have developed a rather urgent sensitivity to the issue of shareholder value...something of a salutary development in my humble opinion.
Best regards,
Gregg |
