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

To: grinder965 who wrote (105904)	10/4/2001 9:36:56 AM
From: carranza2	Read Replies (2) \| Respond to of 152472

Grinder, while you pointed out the problems in the Morningstar report, there is some truth in it which should be addressed, namely, the perception that pro-forma reporting is inaccurate when compared to GAAP standards. The problem with Morningstar's views is that most of Q's charges are not and will not be recurring. We are probably past all these charges, unless Q writes off its NetZero investment [BTW, what an approporiate name for a company, huh?] and its Globalstar holdings. There were some charges when the infra and the handset divisions were sold, as well as the problem with the Brazilian operator. The biggest potential bugaboo is of course Globalstar. If my memory is correct, Q has assigned a value of $600m plus to its potential exposure on G* in its SEC filings, a figure which is of course the worst case scenario. The "real" worst case scenario is undoubtedly smaller--got to keep those lawyers from getting a toehold! What the write-offs and problems have in common, for the most part, is that they are investments which have failed. The analysis simply does not reflect the strength of Q's operations and prospects. Also, don't forget that Q has made some tremendous investments. Always look for the truth in the SEC filings. It's sometimes tedious reading but that is where all the little and not-so-little problems can be found. The Q business is a very sound one. All of this will be water under the bridge in two or three years, in my opinion.

To: grinder965 who wrote (105904)	10/4/2001 10:47:58 AM
From: pcstel	Read Replies (3) \| Respond to of 152472

The report offers one criticism of QCOM which I thought did make sense, and which I haven't seen any discussion of on this board, LOL!! Then you haven't been reading my posts over the last six months!! I have discussed them and pointed out Qualcomm's forte at Financial Engineering! A couple of examples: Qualcomm's Globalstar Contract Services and manufacturing shipped 100,000 G* UT's during CY2000 (Even though there were only 20,000 subs across 3 phone manufactures). All of the revenues of such were INCLUDED to the Pro Forma under Vendor Financing Agreement. Then when they wrote down their G* investment (595 Million), which was mostly vendor financing they EXCLUDED it from the Pro Forma stating that "It was excluded because Globalstar is no longer considered pertinent to on going operations of the company. Then about 4 months later..Globalstar announced that they were going to pay Qualcomm about 30 million dollars out of the few dollars they had left.. And of course.. Sure enough.. Qualcomm INCLUDED the revenue from Globalstar into the Pro Forma. Same goes with LWIN equity... Every other tech company that I have seen EXCLUDES one-time sale of equity from the Pro Forma. But not Qualcomm.. Nope, they claim that they consider Investing as one of their business segments.. So they say that the gains on the sale of LWIN equity should be INCLUDED into the Pro Forma! Yet, they excluded the losses from investment of Globalstar because it was not an investment.. Just a business segment that was no longer relevant. Well, except until the got 30 million dollars form them..Then it was relevant again. In short.. Qualcomm's Pro Forma QOE stinks. Their GAAP earnings are non-existant.. Of course you won't find this discussed here because it is on the list of taboo things to talk about!! And if you do discuss it.. You will simply receive many PM's telling you that it has already been discussed before some time in the past and that further discussions about this subject are frowned upon! PCSTEL