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

To: 100cfm who wrote (46803)	11/1/1999 9:14:00 AM
From: quidditch	Respond to of 152472

100cfm, unless Q realizes a sales price far beyond what any on this thread has ventured (I think the range of prices for sale of the handset division has been from c. $200m to upwards of $1 billion), my guess is that Q's investment sunk into the handset division is probably well north of the latter amount, even after depreciation is factored in. I could be very wrong on this, but since Q has not in the past broken out segment reporting clearly, the amounts of investments and gains (losses) for any particular division/segment has been hard to determine. Thus, when the infrastructure division was sold, no one was really accurate in predicting the sales price or the degree to which infra had contributed to losses, the thread just new it was probably earnings neutral and probably largely negative. In the case of handset also, the guess here is that i) the actual sales price will probably be lower than one might expect--the real value in the deal, hopefully--a strong brand name marketer of personal electronic appliances and a minimum long term commitment to purchase Q's ASICs and ii) the price will result not in a one-time gain but in another charge. The really interesting calculation (aside from the purchaser's commitment on ASIC purchases) will be to see how management shows the pro forma effect of the sale of the handset. In the Q-2 CC, management was hoping for 10% operating margins on the handset division; clearly, by the Q-3 CC, that was not being realized, leading to the decision to sell. Steve