Qualcomm Rises on Optimism Profit Will Beat Estimates
(Apologies if previously posted. Need a database to keep track of the posts these days. <G>)
San Diego, June 3 (Bloomberg) -- Shares of Qualcomm Inc., developer of the world's second-most popular cellular technology, rose 3.2 percent on expectations earnings may beat estimates on demand for the company's wireless phones and semiconductors.
Qualcomm rose 3 3/16 to 102 1/16. The shares have almost quadrupled so far this year.
Demand is increasing worldwide for chips and phones that use Qualcomm's code-division multiple access technology, Tim Luke, an analyst at Lehman Brothers Inc. wrote in a research report. Luke expects to raise his earnings estimates for the fiscal third quarter ending June 30 and the year ending Sept. 30 based on the sales and royalty payments from companies that use CDMA.
''We remain encouraged by the strong growth prospects for both Qualcomm and the global CDMA market,'' said Luke, who met with Qualcomm Chief Financial Officer Anthony Thornley yesterday.
Luke, who rates Qualcomm ''strong buy,'' said his earnings estimates ''may be revised steadily upwards over the balance of 1999.''
He currently expects Qualcomm to earn 65 cents a share in the third quarter and $2.11 for the year. Analysts polled by First Call Corp. expect 61 cents for the quarter and $2.01 for the year.
CDMA
CDMA provides more capacity than competing digital cellular standards and is considered more efficient for data services that let users send and receive e-mail and browse the Internet.
Qualcomm shares had fallen from a record 119 3/4 in the last weeks on concern that sales and earnings would slow after the Korean government ordered local wireless providers to stop subsidizing phone sales starting April 1.
Luke said orders for chips in Korea are still strong, and demand is accelerating in the U.S., Japan and Brazil.
On May 18, Qualcomm said third-quarter earnings will meet or exceed analysts' estimates. Since then, the average estimate of analysts polled by First Call Corp. has risen to 61 cents a share from 59 cents.
Jun/03/1999 16:28
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