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

To: Jim Mullens who wrote (145218)	10/1/2006 7:10:38 AM
From: limtex	Respond to of 152472

JM - Aren't the 06-07 EPS increases a little vulnerable on the downside. And given that you project them at 21% they could end up lower. I'm not sure where that leaves us when it comes to 08 and beyond. Maybe w-cdma will dominate the GSM world in which case growth may continue but we could see WiMax beginning to gain some traction especially with Sprint. Anyway a grwoth in EPS is worth what kind of P/E ( OK in normal times whatever they are) Best, L

To: Jim Mullens who wrote (145218)	10/1/2006 10:12:52 AM
From: 100cfm	Read Replies (4) \| Respond to of 152472

Jim, Yes your numbers prove my point. Look at the difference between unit growth and earnings growth. Especially 06-07. Also you chose to use the absolute high end of estimates. Keep in mind that the majority of estimates are in the 180s. There was a time when it was a given that Q's earnings would outperform it's revenue growth rate by a wide margin. Not now. But if we want to get back to PEs of between 30&40 which is where Q should trade at, we need earnings growth to be much closer to the unit growth rate. Afterall what's the good of selling more and more widgets if more and more isn't falling to the bottom line. I'm just wondering when we reach the point where more of revenue turns into net income rather than less. In other words when does the expense side plateau while the revenue keeps soaring thus dropping an increasing amount to the bottom line. Just look at your numbers. In 07 we will sell more WCDMA than cdma! Q's market has basicly doubled and at best we are only getting a 71% increase? At a $1.88 that's a 15% increase over 06, and a 61% over 05, pretty good but don't expect higher PEs than what we have now.