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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: marginmike who wrote (41068)	9/14/1999 5:10:00 PM
From: Ibexx	Read Replies (3) \| Respond to of 152472

There are about half a dozen folks on this thread who, collectively, have been my best contrarian indicators. Whenever they sold or sounded desperate, I would step in and buy. It never failed. <g> Ibexx

To: marginmike who wrote (41068)	9/14/1999 5:23:00 PM
From: Ruffian	Respond to of 152472

Bloomberg> Qualcomm Says It's in Talks to Sell Phone-Making Unit (Update3) Qualcomm Says It's in Talks to Sell Phone-Making Unit (Update3) (Adds background in 6th paragraph. Closes shares.) San Diego, Sept. 14 (Bloomberg) -- Qualcomm Inc., developer of the world's second-most popular cell-phone technology, said it's in talks to sell its phone-making business and may take a charge as it cuts costs. The company said it plans to reach a sale agreement by year's end. It didn't name the potential buyers. Qualcomm shares rose 17 1/8 to 170 1/2. The company also said it expects profit the in the fiscal fourth quarter of 87 cents a share or more. A drop in handset prices and parts shortages are making it hard for Qualcomm to compete with Nokia Oyj, Motorola Inc. and Ericsson AB, the biggest cell-phone makers. After the sale, Qualcomm will get revenue mainly from its chip business and royalties from other phone makers that license its code-division multiple access, or CDMA, technology. ''Qualcomm would have faced an uphill battle competing with Motorola, Nokia and Ericsson in the handset business,'' said David Powers, an analyst at Edward Jones & Co., who rates Qualcomm ''buy.'' ''By getting out of the business, it can focus on research and development and semiconductor design.'' Qualcomm, the best-performing stock on the Standard & Poor's 500 Index this year, tumbled 12 5/16 yesterday on concern that it might fall short of profit forecasts this quarter. Analysts polled by First Call Corp. expect a profit of 88 cents. In the year-ago period, San Diego-based Qualcomm's net income was $40 million, or a split-adjusted 27 cents a share. Royalties Royalties from other cell-phone companies including Nokia and Motorola made up $93 million of the company's $966 million in third-quarter sales. That's up from $47 million a year earlier. Third-quarter sales of communications systems, which include phones and chips, rose 9 percent to $824 million. Qualcomm said parts shortages were preventing it from selling more phones and warned that it could have similar problems in the fourth quarter. Today, Qualcomm said demand for its chips and phones is stronger than in the previous quarters. Still, it reiterated that shortages and competition are squeezing its profit margins on consumer products. Prices have fallen as manufacturers like Finland's Nokia pick up the pace of sales in North America, the biggest market for CDMA phones. Moreover, the drop is accelerating. Some prices are being cut by 30 percent, compared with 15 percent to 20 percent over the past few quarters, analysts said. Lower prices are cutting into operating margins at other phone makers, too. First-half operating margin at Ericsson, the world's No. 3 cell-phone maker, slid to 1 percent from 13 percent a year earlier. The company expects the margin to pick up next year, when it unveils new models. Speculation Qualcomm's plan to sell the phone-making business comes after months of speculation that began when the company agreed to sell its unprofitable network-infrastructure unit to Ericsson in March. Qualcomm President Rich Sulpizio ruled out a sale of the phone-making business in April. Now, the company said it wants to find a buyer that will assume its workforce and supply its customers. ''We will continue to support our customers and employees through an orderly transition,'' Qualcomm's president of consumer products, Paul Jacobs said in a statement. Qualcomm declined to say what percentage of its revenue the handset unit generates or how many people it employs. The company's 51 percent stake in Qualcomm Personal Electronics, a joint venture with Sony Corp., is under discussion as part of the talks and may be part of a sale, Qualcomm spokeswoman Christine Trimble said. Qualcomm didn't specify other actions it may take to cut costs, the amount of the charge it may take or the quarter in which it would be taken. The company also makes equipment for satellite- communications systems, including the Globalstar Telecommunications Ltd. network. Those operations won't be part of the planned sale, Trimble said. NYSE/AMEX delayed 20 min. NASDAQ delayed 15 min.