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

To: TShirtPrinter who wrote (47793)	11/4/1999 8:54:00 AM
From: Boplicity	Respond to of 152472

I don't recall seeing this article from the SD Union Tribune posted. I love the "global addiction" terminology. From: Ron M Thursday, Nov 4 1999 8:20AM ET His comment above. Soaring Qualcomm plans 4-for-1 split By Mike Drummond UNION-TRIBUNE STAFF WRITER November 3, 1999 SAN DIEGO -- With demand for its wireless technology bordering on global addiction, Qualcomm reported record annual earnings of $420 million on revenues of $3.9 billion yesterday, an 18 percent increase this year over last. Chief executive Irwin Jacobs also proposed a 4-for-1 stock split, reflecting a share price that has more than quadrupled over the last 10 months. The stock closed down slightly yesterday at $224.811/4, before the company reported earnings. The company announced a 2-for-1 split in April. Fourth-quarter net income was $170 million or 91 cents per share, eclipsing consensus estimates of 88 cents, as compiled by First Call. The annual and quarterly figures excluded one-time charges related to the sale of a business unit to Swedish rival Ericsson in May. "We remain very excited about fiscal performance this quarter and the past year," Jacobs said in a conference call yesterday. "We think the wireless market will continue to grow and expand rapidly . . . It should be an exciting year." Increased royalty payments -- what some analysts call "free money" -- from licensing its code division multiple access or CDMA wireless phone technology helped boost Qualcomm's already lofty fortunes. Under new accounting rules, the company for the first time broke out revenues by business segments, which showed that royalties jumped 57 percent over last year to $454 million from $290 million. Qualcomm developed CDMA for the commercial market, where it competes with two older digital mobile phone technologies. While all three convert voice signals into 1s and 0s, CDMA carries both data and voice signals more efficiently and has greater carrying capacity. A landmark patent settlement, coupled with the sale of its once-ailing infrastructure division to Ericsson, has paved the way for increasing global adoption of Qualcomm's technology. The CDMA Development Group, a trade organization, reported there were nearly 35 million CDMA subscribers as of June, the most recent numbers available. That's up more than double from the same time last year. The company also reported a 72 percent increase in revenue from its phone-making division, which Qualcomm intends to sell by year's end. Jacobs said several companies have made offers. The company makes an estimated 2 percent profit from each phone sold, according to Pete Peterson, an analyst with Volpe Brown Whelan. Jacobs used yesterday's conference call to talk about a three-day demonstration of HDR or high data rate in San Diego next week, which coincidentally marks the 10th anniversary of the company's inaugural demo of CDMA. HDR beams information to mobile phones and computers via a high-speed wireless network. Jacobs said HDR will be a high-speed Internet alternative to cable modems and digital subscriber lines, both of which generally cost more than $40 a month, not including installation and modem-leasing fees. Jacobs and other officials talked about the company's banner year, about its recently released phone for satellite system Globalstar, and about continued adoption of CDMA. However, at least one analyst noted that the company didn't offer much in the way of crystal-ball gazing. "The biggest statements are those that went unsaid," said Peterson, the Volpe Brown Whelan analyst. "They only talked one quarter forward. What didn't get said is what comes out of next year. Why? Because next year's company will look very different from this year's company." Indeed, Qualcomm won't be making phones in a few months. Peterson sees that as Qualcomm "getting back to its roots" as a CDMA technology company. He called the handset unit, as well as the jettisoned infrastructure division, "diversions" from the company's core mission. "It's identity has been the development and advancement of CDMA," Peterson said. "They're shedding those elements that detract from that original premise." Mark Roberts, analyst with First Union Securities, concurred. "I think that they're positioned very well going forward," he said. "The most significant factor is that growth of CDMA around the world continues to exceed people's expectations and Qualcomm is a very clear beneficiary of that. "What Qualcomm has is, in fact, a better solution for wireless communications."

To: TShirtPrinter who wrote (47793)	11/4/1999 9:03:00 AM
From: JGoren	Respond to of 152472

I think the company concluded that it could not wait another two months and a few days, that if handset division sale is done before end of the year, the price would get just too high for an orderly market. Plus, announcement itself would keep the stock moving upwards. Stock price increase could force some funds to unload a portion of their holdings to reduce their percentage amounts (even though other funds would be buying) and the market would better absorb if the number of shares increases and the price per share decreases. Company may have decided it also needed share currency (authorized but unissued shares) to engage in buyout--couldn't wait another couple of months because it might have to pass by on a potential opportunity. Of course, authorization could be done as part of a deal (after announced), but given the need to split, might as well go ahead and do it.