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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: gdichaz who wrote (28942)	11/15/2002 4:33:51 PM
From: Jim Mullens	Read Replies (2) \| Respond to of 197207

CHAZ- PCS/ VZN Reply- SI#4 Thanks for the warm welcome. I’m Glad you’re posting again as you were “many moons ago”. I agree with what you say regarding PCS and VZ as “those are the Q’ horses in the US race.” Verizon certainly appears slow in moving technology ahead and taking advantage of their CDMA network, but hopefully they will be “sure” in doing it right. My understanding is that their network is so complicated with the integration of AMPS and all, that they test, test again, and test some more before implementing anything. But they’re up and running with 1X, and you got to give them credit for choosing BREW and they are trialing DO. Hopefully they will have some “interesting” handsets with cameras attached to sell for the holidays. PCS to their credit is pricing data correctly to give them a tremendous advantage over the competition and from what I understand they have a better selection of 1X handsets than VZ. Hopefully with 1X, both PCS and VZ can begin to differentiate themselves from the GSM carriers with more compelling handsets and better data pricing rates and start to win crossover subscribers from the GSM crowd. I believe number portability takes affect November 03 and that should provide further impetus for crossovers. The recent announcement regarding Monet and their “all you can eat” high speed wireless internet access for $30 bucks may prove to be an “interesting” business. Ben’s suggestion to use the $3+Billion cash bundle to fund low cost- high speed wireless internet access companies instead of a dividend or buy back also makes a lot of sense IMO. Leap Wireless might fit that bill in rural America, and don’t forget we still have Nextwave out there fluttering in the breeze awaiting the Supreme Court decision, which might be positive given the initial comments from some of the judges. On a different note, the volume today was about 30 M shares (last two days much higher than normal also). So, as our “analyst” friends are still downplaying the earnings report, forward guidance (CONSERVATIVE), and the marvelous London presentations, someone out there is buying. You might get a kick out of this is sent to CNBC the other day- CNBC Open letter to Bill Parsons (another senior moment- s/b Griffiths) and CNBC (11-11-02) Just wanted to let you know I caught your interview of Dr. Irwin Jacobs Friday afternoon and I appreciate the fact that CNBC could find the time to speak with him after Qualcomm reported their earnings yesterday. Qualcomm’s earnings report and conference call afterwards was really quite remarkable considering the condition of the general market and technology stocks in particular. It’s quite obvious to me that neither you nor CNBC paid much attention to Qualcomm’s performance considering your line of questioning and CNBC’s Qualcomm coverage last night and today. Let me bring you up to date with just a few of their significant accomplishments. 1. Beat the consensus Q4 02 EPS estimate (pro forma) (27 cents ) by 4 cents or 15%, reporting 31 cents. 2. Provided EPS guidance for Q1 03 in the range of 35 cents to 38 cents, sequential increase of 13% to 23%. 3. Provided EPS guidance for FY 03 in the range of $1.15 to $1.20, sequential increase of 17% to 22% from FY 02 ($.98). It should be mentioned that during the conference call Qualcomm responded to a question that FY 03 guidance was on the “conservative” side. 4. Provided guidance for MSM chipset sales for Q1 03 in the range of 25-27 million units versus 20 million in the prior quarter and 13 million for Q4 01. (increases of 35% and 107%, respectively) 5. Provided guidance for CDMA handset sales for CY03 in the range of 100- 105 million versus 85 million for CY02 and 74 million for CY01. (increases of 24% and 42% respectively) 6. Reported the pro forma gross margin for the fourth quarter of FY02 was 69%. 7. Reported cash, cash equivalents and marketable securities, excluding the QSI segment, totaled approximately $3 billion at the end of Q4 02 with no debt. Again, I believe you would have to agree with me that Qualcomm’s results and guidance are quite remarkable, especially in this market. This brings me to a few questions for you and CNBC in general. It has been my observation over the years that CNBC has great difficulty in reporting anything positive regarding Qualcomm, and naturally I’m curious as to why that is so? 1. I noticed in your interview with Dr. Jacobs that instead of trying to help your audience understand why Qualcomm’s performance stands out as one of the few companies doing well in this environment, you preferred to concentrate other “issues” such as (1) why the handset business was sold several years ago, (2) about future (several years hence) possible 3G technology choices for China and their impact on Qualcomm’s royalty rate, and (3) the “inventory” issue (I believe). I do appreciate the fact that you did treat Mr. Jacobs with more respect than your co-host Ms. Cabaerra did with Mr. Thornley in her interview after the prior quarterly report. 2. I am also curious as to why your interview was limited to a minute or so when given a little more time Dr. Jacobs could have provided some profitable insight to your audience as to the reasons why Qualcomm and 3G CDMA2000 are succeeding and the alternative path to 3G (WCDMA) is having difficulty. 3. I am also curious as to why CNBC gave Qualcomm’s significant accomplishments this quarter such little mention following their earnings report? I noticed Joe Kernin (Friday Squawk Box) “squeezed” in a few seconds and managed to diss it again with a negative Bear Stearns comment. CNBC’s great difficulty in reporting anything positive regarding Qualcomm continues to this day. In fact, very little was said on CNBC Thursday afternoon and Friday despite Qualcomm’s outstanding earnings report and very positive forward guidance. Qualcomm stands out in this regard amongst all the large cap companies. Is it because Qualcomm does not provide advertising revenue to any of the CNBC companies? Is it because Qualcomm is held short in one of GE Capital hedge funds and nothing is said if nothing negative can be reported? By the way, don’t you also think it important in terms of “fair disclosure” that CNBC disclose their long and short position in the stocks held and traded by the various GE Capital funds? In regard to the disclosure issue, you ask the “analyst” making a comment if he/they own the particular stock in question and I believe you should also ask them if they have a “short” position or have advised any of their clients to do so for the stocks they are dissing. I would appreciate hearing your thoughts regarding my above questions. Thanks for your time- Jim Mullens