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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: foundation who wrote (12281)	6/14/2000 1:33:00 PM
From: Maverick	Read Replies (1) \| Respond to of 13582

CSFB, 5/25/00:QCOM financed $0.5B + 170M AR to GSTR Globalstar Shipments Slowing. The Wireless Systems segment growth is also being dragged down by the Globalstar project. Qualcomm grew revenue from $373M in 1998 to $435M in 1999. Now that the project is nearing completion, we see the revenue from this project falling sharply. The declines in the Globalstar project will offset expected double-digit growth in the wireless transportation business. Moreover, Qualcomm has almost $500 million in interest bearing financing and $170 million in receivables extended to Globalstar. If the project is unable to escape Iridium's ghost and see stronger subscriber additions, we see risk recovering this financing. With these market trends developing, Qualcomm needs to execute well on all fronts to achieve a significant rebound in their stock. This would include breakthroughs in growing worldwide demand for CDMA, licensing streams, and expanding sales with companies such as Nokia and Motorola in the ASIC business. The company's core ASIC and chip business is very profitable and should generate significant cash. However, at current levels of roughly 60x 2001 earnings, the stock is on par with Cisco and ahead of Nokia's 2001 P/E of just over 50. Given the trends taking shape, we remain cautious with our outlook on the stock.