To: Maurice Winn who wrote (82909 ) 11/9/2011 8:52:45 AM From: Cogito Ergo Sum Read Replies (1) | Respond to FWI,,Johnny Canuck who wrote ( 47273 )11/9/2011 3:14:13 AMFrom: Johnny Canuck Read Replies (1) of 47275 Qualcomm Looks Like The Winner In The Smart Phone Chip War 2 comments | November 8, 2011 | about: QCOM , includes: AAPL , INTC , MSFT , NOK QCOM ) closed out the books on a solid fourth quarter with revenues rising by 39% year over year to $4.12 billion. Guidance for 2012 was issued with $18-19 billion in revenues and $3.42-3.62 in non-GAAP diluted EPS. INTC ) overall share of the smart phone has gone from $10 in parts down to 50 cents, with Qualcomm taking over a portion of the chip design.MSFT ) has gone so far with Windows 8 as to name Qualcomm their only partner in the smart phone area and the first round of Windows powered Nokia ( NOK ) smart phones. Microsoft even went so far as to demonstrate a Windows 8 PC running on Snapdragon at the BUILD conference. The Windows 8 PC was shown to run on a low-power mode and remain on the network and up to date, showcasing features similar to smart phones. GOOG ) acquisition of Motorola Mobility smart phone manufacturers are worried about future versions of Android tailored to Motorola Mobility smart phones. Disclosure: I am long QCOM, AAPL.Additional disclosure: Source: Qualcomm earnings report and website, iSupply website.Johnny Canuck who wrote ( 47274 )11/9/2011 3:34:54 AMFrom: Johnny Canuck of 47275 Lingering Concerns over Qualcomm’s Accounting: Greenberg Herb Greenberg Qualcomm Disclosure Insight Despite reporting favorable results last week, QCOM [QCOM 57.03 has a lingering accounting exposure dating back to at least Dec-09 that keeps us concerned. The nature of the accounting exposure is anybody’s guess as disclosures on the issue are vague and have provided no new information since being initially reported in Nov-10. The typical reaction of investors, which is to assume a disclosed risk related to an accounting matter and associated formal SEC investigation is already in the stock, may be misguided in this case. 2011 Dividends: Who’s Paying, Who’s Not? Corporations Rush to Credit Markets for Cash CNBC Stock Blog That QCOM disclosed this exposure in the first place, especially after sitting on related matters for nearly a year, tells you management deems the matter material. That it continues to be disclosed after yet another year suggests the company is having a difficult time resolving it. Using our expertise in parsing disclosures, and in this case assessing SEC investigations, we show that the risk associated with this matter could be greater than perceived. These are our concerns: -It is likely that the SEC has been investigating QCOM longer than the company’s disclosures indicate. -QCOM waited 2 months before disclosing the formal SEC investigation in the 10-K, giving it no prominence as would have been the case with an 8-K. -The formal investigation could indicate that QCOM is not cooperating with the SEC’s investigation. -QCOM sat on the whistleblower allegations for almost a year. -Whistleblowers are typically inside or otherwise close to the company. As such, they risk their position with the company, future employment opportunities, persecution, and retaliation. -There has been no meaningful update since the initial disclosure in Nov-10, so we do not know where the SEC investigation stands today. -QCOM has not elaborated on the nature of the whistleblower allegations or the issues in the SEC investigation. -QCOM’s initial disclosure of an internal review was in Nov-10, at which point it had already been completed. -QCOM did not report the results of the internal review. This is despite the fact the audit committee deemed it necessary to engage forensic accountants and independent legal counsel. -The poor quality of QCOM’s disclosure related to the SEC investigation leaves us questioning the company’s overall disclosure practices. 10-K Questions? Comments? Write to HerbOnTheStreet@cnbc.com Follow Herb on Twitter: @herbgreenberg
