Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: T L Comiskey who wrote (10584)	10/31/2000 1:05:09 PM
From: T L Comiskey	Respond to of 65232

LOS ANGELES (Reuters) - Wireless technology company Qualcomm Inc. (NasdaqNM:QCOM - news) -- after a rough and tumble quarter marked by a drop in Korean handset sales -- is still likely to post earnings in line with consensus estimates, analysts said. They said fourth quarter licensing revenues for the San Diego-based company, whose CDMA (news - web sites) mobile telephone technology is fast becoming a standard in the wireless industry, would compensate for the anemic South Korea handset sales. ``We think it was a challenging quarter mainly because the Korean handset sales really fell off a cliff,'' said Banc of America Securities analyst Mark McKechnie, who has a buy recommendation on the stock. ``So chipset sales should be light but offset by licensing revenues.'' Analysts said Qualcomm was seen either matching the fourth quarter earnings consensus of 24 cents per share, as compiled by research firm First Call/Thomson Financial, or falling a penny under it. In last year's fourth quarter, Qualcomm posted earnings excluding charges of $170 million, or 23 cents share adjusted for a four-for-one stock split at the end of last year, on revenues of nearly $1.1 billion. Analysts are expecting weaker sales, due to the Korean government's decision to eliminate subsidies on mobile phones, but will be closely watching the extent of sales declines. Analysts estimated Qualcomm's revenues between $635 million and $714 million for this year's fourth quarter. Qualcomm's fourth quarter began with concerns over South Korea, as the subsidy ban sent prices soaring and sales there tumbling. The company scored a victory, however, when its patents were upheld abroad and later when China pledged to build a CDMA network based on its technology, allaying concerns over its adoption of CDMA, or code division multiple access, the foundation of the latest wireless networks. ``No one should be surprised with the issues behind (this quarter),'' said Morgan Stanley Dean Witter analyst Louis Gerhardy, who has an outperform rating on the stock. He reiterated the medium- to long-term prospects for the company were positive. ``Intermediate to long term I think the fundamentals are falling into place for this company as CDMA is becoming more prevalent in wireless,'' Gerhardy said. Gerhardy and McKechnie said sales declines for South Korea appeared to have hit bottom and said revenues to the region would likely improve in the December quarter. Qualcomm stock was up 5/8 at $68-3/4 in midday trading on Nasdaq. Shares of the volatile stock have been in the $55 to $85 a share range lately. Shares of Qualcomm took a nosedive on Monday, as investors feared it could be hurt by its exposure to beleaguered satellite company Globalstar Telecommunications (NasdaqNM:GSTRF - news). Qualcomm's shares ended on Monday down 9.0 percent, or $6-3/4, to $68-1/8, after falling to as low as $66-5/16. Volume was a robust 14 million shares. The company's shares have fallen from a high of $179-5/16 at the beginning of the year. Analysts said the market was concerned about Qualcomm's exposure to the New York-based satellite phone company, which posted a third-quarter loss on Monday that came in bigger than analysts had expected at five times the year earlier level. Seoul's presidential office said on Oct. 18 that South Korea's telecom equipment manufacturers will have a chance to join China's projects to expand a mobile phone system developed by Qualcomm. That agreement came as China tries to expand its mobile telecom network based on Qualcomm-developed CDMA technology. Email this story - (View most popular) \| Printer-friendly format