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

To: Uncle Frank who wrote (41242)	9/15/1999 5:50:00 PM
From: Ruffian	Read Replies (1) \| Respond to of 152472

WSJ-Dr Jacobs; Qualcomm CEO: Chip Demand Strong, Handset Margins Low By JOHNATHAN BURNS NEW YORK -- Qualcomm Inc. (QCOM) Chief Executive Irwin Jacobs said the company's decision to sell off its phone-making business came earlier than the company had expected. In an interview with Dow Jones Newswires, Jacobs said the company had intended to ride out at least another year with the handset business intact, but it was quickly dropping below the breakeven point. "It was operating at a margin that wasn't taking away from the bottom line," he said. "But the average sell price for handsets had gone down faster than we anticipated." The company also experienced parts problems that delayed the release of new phones for two quarters, Jacobs said. Qualcomm announced it would sell its handset business Tuesday, the same day the company said it would meet or exceed analysts' earnings estimates of 87 cents a share in the fourth quarter. The handset operations account for 45% of the company's revenue. The company already has several interested parties who are in "early discussions," Jacobs said, though he declined to mention names. Jacobs said he doesn't expect the handset-business sale, which the company hopes to finalize by the end of the year, to negatively impact the company. He said Qualcomm will be able to cut margins and hone its chip-making operations. "We see our chip-making business as being very, very strong," he said. "I think other companies are going to have a hard time keeping up." Investors apparently agree. After trading up more than 11% Tuesday, Qualcomm's stock closed up 3 3/8, or 2%, to 173 7/8 Wednesday. Jacobs earlier met with analysts in New York. Raj Srikant, an analyst with First Albany Corp., said the move will allow Qualcomm to focus on the chip-making operations, where he expects the company will flourish. "More and more, the rest of the world is going to look to them for their chipsets," he said. -Jonathan Burns; 201-938-2020