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

To: slacker711 who wrote (81207)	10/20/2008 5:03:37 PM
From: David E. Taylor	Respond to of 197798

TI's Q3 not bad with slight miss but 4th quarter guidance is well down, weakness attributed to wireless baseband, worst performer in Q3 with revenues of $915 million vs $1.1 billion a year ago. TI's Q4 guidance will likely hit QCOM and others in wireless space manana. Texas Instruments Q3 profit falls; guides Q4 - quick facts 2 Monday October 20, 2008 16:43:00 EDT (RTTNews) - Texas Instruments Inc. (TXN) reported third-quarter net income of $563 million, or $0.43 per share, lower than $776 million, or $0.54 per share in the same quarter last year. On average, 31 analysts polled by First Call/Thomson Financial expected earnings of $0.44 per share. Revenue for the quarter declined to $3.39 billion from $3.66 billion in the comparable quarter a year-ago. Thirty Wall Street analysts had consensus revenue estimate of $3.40 billion. Commenting on the results, Rich Templeton, CEO, said, "We entered the third quarter with a cautious view of the economy and its impact on our markets. Revenue was weak, as expected, because consumers and corporations reduced their spending in this uncertain economy." For the fourth quarter of 2008, the company expects earnings in the range of $0.30 - $0.36 per share on revenue of $2.83 billion - $3.07 billion. Analysts, on average, expect earnings of $0.43 per share on revenues of $3.34 billion. Templeton added, "Our outlook for the fourth quarter is for revenue to decline substantially based on weak order trends over the past few months." The company also announced it is taking actions to reduce expenses by about one-third, or more than $200 million annualized, in its Wireless business, especially in its cellular baseband operation. The company is also actively pursuing the sale of the merchant portion of this operation and is in discussions with potential buyers. Reductions in cellular baseband operations will begin immediately and are expected to be complete by June 2009. The company expects to take restructuring charges of approximately $110 million across the next three quarters. David

To: slacker711 who wrote (81207)	10/20/2008 5:39:45 PM
From: slacker711	Read Replies (1) \| Respond to of 197798

Qualcomm: AmTech Cuts Estimates on Phone Slowdown Posted by Tiernan Ray blogs.barrons.com There’ve been a slew of developments in the last few days relating to cell phone chip maker Qualcomm (QCOM), some positive, some negative. First came the announcement last Wednesday, Oct. 15, that a ban on the import of Qualcomm chips to the US would be overturned. Then on Thursday, Nokia’s (NOK) Q3 results reflected a 7% decline in sales from the prior quarter, not a good indication for the phone market globally. Then came Friday’s announcement that Nokia will pay Qualcomm between $2.3 billion and $2.5 billion to settle a royalty dispute. And then this morning’s disclosure in telecom equipment provider Ericsson’s (ERIC) Q3 report that it’s “hard to predict how operators will act and to what extent consumer telecom spending will be affected.” What does it all mean? Well, American Technology Research analyst Mark McKechnie today writes that he is cutting his estimates for Qualcomm “to reflect softening in the US and lower growth in 2009,” and he thinks Nokia may be the better investment. McKechnie now expects Qualcomm to sell 82 million chipsets in the fiscal first quarter of 2009 ending in December, down from a prior estimate of 89mil, and he’s lowered his average selling price expectation by 20 cents to $19.80. McKechnie sees just 16% growth in CDMA industry unit in the December quarter, versus a previous 19% forecast. He’s also reducing his royalty estimate for Qualcomm for all of fiscal 2009 ending next September. All this adds up to a forecast cut to $2.50 from $2.58 for fiscal 2009, writes McKechnie, including 24 cents to 26 cents per share in royalties from Nokia. In addition, McKechnie thinks Nokia will come out the winner despite its staggering payment to Qualcomm. Although Nokia will probably have to pay Qualcomm a total of $8 billion to $10 billion over the next ten to fifteen years. But that works out to a royalty rate of less than 1.5%, by McKechnie’s calculations. “Nokia will be paying something less than the 1.5% rate to Qualcomm on a forward basis as part of the 1.5% rate will be amortized from the $2.3 billion [that Nokia is paying up-front]. Thus, with the payment behind, future cash flows will look better net for Nokia than Qualcomm. McKechnie still has a “Buy” rating on Qualcomm, though he lowered his price target today to $55 from $65. Qualcomm shares today are down 39 cents, or 1%, at $39.36.