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.

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

To: hueyone who wrote (125835)	12/4/2002 6:13:37 PM
From: hueyone	Respond to of 152472

Just for the heck of it, I checked back one more year. The 2002 fiscal performance compared to the 1996 fiscal performance does look very impressive. But the company only made a measly split adjusted 3.75 cents per share in 1996 (not including adjustment for stock option expense). Hence, a person ends up with one of those completely meaningless comparisons of a relatively profitable year to a a barely profitable year----which is hardly indicative of a long term compound growth rate that anyone could reasonably call a long term growth rate with any conviction. IMO, Huey Edit: I just looked at fiscal 1995 GAAP EPS. This is 6.5 cents EPS, so from fiscal 1995 we don't see a ten fold increase in earnings to 2002 either.

To: hueyone who wrote (125835)	12/4/2002 8:42:58 PM
From: cfoe	Read Replies (4) \| Respond to of 152472

I have a question about this business of "expensing options" and then counting the dilution resulting from real or assumed exercise against the lowered EPS. First, I am a CPA by training, so I understand accounting and I freely admit that my past "accounting knowledge" may be getting in my way. Here is what I do not understand (and please no rants in response, just a short simple explanation): 1) What exactly is the expense that would be recorded? Is it the difference between the option price and the current market price or something else? 2) Where else in the accounting for revenues and expenses does one transaction - the exercise (actual or implied) of options - get counted twice against EPS (earnings/shares outstanding)? First as an expense lowering the dividend (earnings) and then again as a divisor (shares outstanding)? Again, please no rants. Just a simple explanation for something this past accountant has had trouble grocking. Thanks.

To: hueyone who wrote (125835)	12/4/2002 8:45:30 PM
From: JustLearning	Respond to of 152472

Hi HueyOne: One thing to take into account is that early on, Qualcomm had two divisions - handsets and infrastructure - which required significant investment. As I recall, the infrastructure division generated significant losses early on, so you could look at the data the way you have, but it is not an accurate picture of the growth/profitability of the chip or licensing division which is now the main portion of the business. I gather you prefer to focus on GAAP earning (which is fine), but the business model changes after the sale of the infrastructure and handset division is so profound, that in my opinion the earnings comparison between now and then (purely on GAAP) is not very useful (to me). Anyway my two cents...