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

To: genedabber who wrote (79288)	7/28/2008 12:26:18 PM
From: Art Bechhoefer	Respond to of 197214

Regarding the 6-quarter delayed royalty payments leading to an estimated $0.07 to $0.13 additional profit per share, the difficulty in estimating seems to be tied to how the actual fees will be spread out from year to year. If we do not know how fees/payments are to be amortized, we can only guess at how much money is involved. One thing we do know is that payment of a lump sum taken in a single year would be ill considered if the objective was to minimize corporate taxes. Thus, it's likely that if the actual payment of royalties owed were taken in a lump sum, the effect on earnings before taxes would be larger. Whatever methods are used to account for the payments, it's nice to be in a position where a company can spread profits to reduce taxes. Some companies at this point would be happy to report anyl profits. Art

To: genedabber who wrote (79288)	7/28/2008 12:38:54 PM
From: David E. Taylor	Respond to of 197214

Gene: I think QCOM will just take an arbitrary amount into Q4 2008 to get them a decent/impressive quarter. I don't think it will be a large amount taken from the upfront payment, and that's reflected in Keitel's preliminary estimate for the Q4 EPS increase. It also may not have much to do with what they would have gotten for 6 quarters from NOK at the old royalty rates, and it does not have to. Except for some of the folks here who think QCOM deserves its Shakespearian pound of flesh, nobody is gonna care. Why come in with a huge amount for Q4? It'll just make 2009/2008 comparisons look not as good, and will decrease the amount of banked cash QCOM can play with in future quarters. Getting prepaid a large chunk of cash from NOK gives QCOM considerable flexibility in managing future revenues and earnings. David