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To: Mike Buckley who wrote (3643)	7/10/1999 11:59:00 AM
From: Tom Ardnij	Read Replies (2) \| Respond to of 54805

Mike and Thread, The following is from Salomon Smith Barney's industry outlook for telecommunications. QUALCOMM (QCOM,1-H,$142 1/4) RESULTS DUE JULY 20, AFTER THE CLOSE. * EPS should be at least $0.67 vs. consensus of $0.63 * Sales of CDMA ASICs (+81.2% YOY) & mobile phones (+11.7% YOY) should be robust * Revenue, ex royalties, should be up 15% YOY * Royalties from other CDMA mfrs should be $86 mm. vs $47 mm. last year * We estimate gross & operating margins for F3Q99 of 31.0% & 9.9%, respectively. We believe Qualcomm's EPS for F3Q99 could exceed our estimate of $0.67 due to continued strength in (1) mobile phones, (2) ASICs chipsets, and (3) royalty fees. We estimate F3Q99 EPS should be $0.67 vs. $0.14 reported last year and compared to consensus of $0.63. Revenue, excluding licensing and royalty fees, in our opinion, should increase 15% to about $951 million from $828.6 million a year ago. Licensing and royalty fees, which represent pure profits, are estimated at $86.2 million for the quarter vs. $47 million a year ago. Licensing and development fees now reflect the on-going growth in royalties from the CDMA marketplace as opposed to last year when this line item not only included royalties from manufacturers but also one time payments from manufacturers interested in entering the CDMA market. Qualcomm has now licensed virtually every manufacturer, including all the major vendors such as Ericsson, Lucent Technologies, Motorola and Nokia. Thus, licensing and development fees now largely reflect royalties received from manufacturers of CDMA infrastructure and cell phones. Gross and operating margin for the quarter should be 31.0% and 9.9%, respectively, vs. 24.6% and 0.8% a year ago. Moreover, we believe that Qualcomm is fast becoming synonomus with the wireless Internet since 3rd generation wireless networks, which are likely include intellectual property rights associated with Qualcomm, are being optimized for data applications and the Internet. Sounds great!!! Best Regards, Tom