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To: SusieQ1065 who wrote (8745)	7/26/2001 10:25:12 PM
From: SusieQ1065	Respond to of 208838

Review and Commentary of QCOM Earnings Report.. Qualcomm (QCOM) 59.66 +0.07: The march goes on. Qualcomm posted yet another solid quarter with EPS coming in at $0.22, one penny better than consensus. However, the real story is on the revenue line as total sales hit $640 mln vs consensus of $609 mln driven by much stronger than expected chipset sales. This latter point is impressive as many chip companies have been describing difficult pricing conditions recently. SepQ looks solid as QCOM expects revenue to increase by roughly 10% sequentially, or $704 mln, a good bit higher than consensus of $680 mln. The higher estimate even assumes moderately lower shipments of Mobile Station Modem (MSM) chips in SepQ. If the company expects to hit the revenue number, the licensing business is expected to be very strong in SepQ. Mgmt confirmed this during the Q&A portion of call.....Well, this would not be a QCOM note without discussing China. On the call, the company was positive on the prospects there, especially given the fact that Beijing was awarded the 2008 Olympics. Qualcomm signed its first three license agreements with Chinese manufacturers in JunQ and is seeing the impact of China Unicom's deployment in China with strong infrastructure chip shipments and orders from several manufacturers....Also, some were concerned about the company's recent decision not to spin-off of its CDMA chipset business (QCT). QCOM announced the spin-off a year ago mostly to protect the company's CDMA licensing business (QTL). However, since QCOM has now secured multiple cross-licensing agreements providing QCT with access to GSM patents, the company no longer needs to separate QCT to protect QTL. The most notable cross-licensing agreement was the recent Nokia deal. So don't worry about it....While the company lowered its forecast of CDMA phones expected to be sold in calendar 2001 to 75 mln from the mid-80 mln range and a corresponding 15% annual decrease in average selling prices of CDMA phones, the company more than compensated by saying it expects SepQ to be the trough. DecQ will be helped a lot thanks to stronger sales of the 1X 3G chipset. Bottom line, QCOM continues to impress. At this point, China seems to be more of a matter of when rather than if. We expect the SepQ to be an even more impressive conference call as the outlook for next year should be great. -- Robert J. Reid, Briefing.com