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

To: kech who wrote (34007)	4/9/2003 1:13:45 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 196577

From Tim Luke Summary: Update and Preview for Fiscal 2Q03 Following recent weakness, we provide an update on CDMA innovator QCOM and preview the company's March quarter. Our estimates and rating remain unchanged. QCOM will report its fiscal 2Q03 on April 23. We expect QCOM to deliver solid March quarter, in line with its upside preannouncement for 28M chips. We believe the company's EPS may exceed our estimate of $0.36. We believe June is likely to be affected by a slower 1H03 in China on lower CDMA promotions, mixed initial momentum in India, and subdued macro conditions in Korea and Japan, although these trends may be partially balanced by solid demand in North America, particularly Verizon, and signs of health in Latin America. We believe this sequentially slower backdrop is reflected in QCOM's June guidance. We expect QCOM to retain its 23-25M chip estimate for June. Our estimate remains 24M, the midpoint of the range. We recognize that upside in the June quarter may be unlikely. We are currently modeling flat chip shipments and only a modest improvement in EPS in the September quarter. While visibility is clearly limited, we believe management is likely targeting upside to our flattish outlook. Following recent weakness, we believe near term catalysts remain limited, although we note that QCOM will be keynoting at our Global Wireless conference on May 19 and hosting an analyst day on May 21. Given QCOM's impressive long term positioning, we believe the shares may find support at $30-$33 or 25x CY03 EPS. Guidance: * F 2Q03: Chipset shipments of 28 million * F 3Q03: Chipset shipments of 23-25 million * F 2003: EPS of $1.34-$1.39 * C 2003: Industry shipments of 105-112M CDMA phones Regional Update: Americas, Japan Solid, but Near Term Visibility Limited in Korea, China, and India We believe that CDMA handset shipments in both North America and Latin America on track with our estimates. In addition, Japanese CDMA subscriber trends through March are broadly in line with our estimates. KDDI reached 6.8 million 1x subs by the end of the March, slightly below the company's 7.0M target. Near term visibility in China, India, and Korea appears somewhat limited. Indian carrier Reliance now appears likely to introduce commercial service on May 1, one month later than previously expected. Despite a somewhat uncertain beginning, we note that Reliance currently has approximately 1 million CDMA subscribers and at least 1 million additional pre-loaded subscribers. We retain our full year target of 7 million CDMA handsets in the Indian market. In China, moderating service promotions and suggestions of continued CDMA inventories have moderated CDMA handset shipments recently. However, Chinese CDMA net adds should increase over the next several months given that Unicom is launching 1x and will bring prepaid CDMA service to market shortly. Unicom retains its estimate of 13 million net adds in 2003. We expect 15M handset shipments in China this year. The Korean also has been market has been difficult in recent months. We expect sales of approximately 15 million CDMA units in 2003, approximately 15% of the total CDMA market.