Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: METMAN who wrote (7322)	1/20/1998 4:40:00 PM
From: Valueman	Read Replies (1) \| Respond to of 152472

QUALCOMM Reports Record First Quarter Results --Revenues $786 Million, $.58 EPS Before One-Time Items-- SAN DIEGO -- January 20, 1998 -- QUALCOMM Incorporated (NASDAQ: QCOM) today reported record first quarter results with revenues of $786 million for the first quarter of fiscal 1998, more than doubling revenues of $389 million for the year ago quarter and a 31 percent increase over last quarter. Net income for the first quarter was $37 million compared with $9 million for the same period in fiscal 1997. Earnings per share for the first quarter of fiscal 1998 was $.50 per share (diluted) compared with $.13 per share (diluted) for the same period in fiscal 1997. Earnings per share before one-time items in the first quarter of fiscal 1998 was $.58 per share (diluted). Non-recurring items included the write-off of in-process research and development acquired in the purchase of assets from Now Software and the write-down of obsolete leased equipment. These one-time items were partially offset by a gain on the sale of an investment. "We shipped a record number of CDMA phones and chip sets in the first quarter of fiscal 1998, with good progress in ramping production and improving the yields in our new phone models, particularly in the second half of the quarter," said QUALCOMM Chairman and CEO, Dr. Irwin Jacobs. "In addition, we continued to expand our market position as a major supplier of cdmaOneT infrastructure with agreements in Africa, Eastern Europe and Asia during the quarter. Globalstar development accelerated and the OmniTRACS installed base grew to total more than 224,000 units worldwide. We continue to focus on managing growth and improving profitability." "Demand for our ASIC products in South Korea continues to be positive and we remain confident in the long-term prospects for CDMA in the region. We also expect that our Korean licensees will expand their export activities in the near-term, which will ultimately benefit the worldwide acceptance and deployment of CDMA," Jacobs added. Highlights of Financial Performance Communications systems revenues of $677 million for the first quarter of fiscal 1998 more than doubled revenues for the same period last year. This significant increase was driven by the continued growth in the sales of Code Division Multiple Access (CDMA) phones, Application Specific Integrated Circuits (ASICs) and infrastructure equipment. Communications systems gross margin for the first quarter was 25 percent compared to 20 percent in the first quarter of fiscal 1997, reflecting overall increased margins on the sale of CDMA equipment due to lower costs achieved with high volume manufacturing and a greater volume of ASICs sales. License, royalty and development fees were $45 million or 6 percent of total revenues for the first quarter of fiscal 1998, compared to $26 million or 7 percent of total revenues for the year ago period, both on a cash basis. New licensees included Synertek (subscriber license) and Marconi Instruments (test equipment license). The Company expects to continue to experience quarterly fluctuations in license, royalty and development fees due to the variability in the amount and timing of CDMA licenses and royalties. Contract services revenues were $64 million for the quarter, a 66 percent increase over the fiscal 1997 first quarter revenue of $39 million. The increase is attributable to the development agreement with Globalstar which began in 1994. Operating expenses, including research and development, selling and marketing and general and administrative, increased to $167 million or 21 percent of revenue in the first quarter of fiscal 1998 compared to $89 million or 23 percent of revenues for the same period last year. The Company continues to invest in the research and development of new CDMA infrastructure, ASIC and subscriber products. Selling and marketing expenses increased due to higher volume of sales along with increased national and international marketing activities. General and administrative expenses continue to increase to support the overall growth in the Company's operations, as well as increased litigation expenses. On November 10, 1997, the Company acquired Now Software, Inc. In conjunction with the acquisition, the purchase price of approximately $10 million was allocated to the assets acquired based upon their fair market values. Assets acquired included certain software products still in the development stage which are not considered to have reached technological feasibility. This purchased "in-process research and development" totaled $7 million and was expensed at the acquisition date. During the quarter, the Company recognized other expenses of $5 million for the write-down of leased manufacturing equipment that is no longer utilized in the manufacturing process. Interest income increased to $12 million for the first quarter of fiscal 1998, representing the increased cash balance as a result of proceeds received from the Trust Convertible Preferred Securities offering during the second fiscal quarter of 1997. Other non-operating items in the first quarter of fiscal 1998 primarily include income related to a gain on the sale of shares in Entel Telefonia Movil S.A. and the net minority interest in QUALCOMM Personal Electronics and other consolidated subsidiaries. The effective tax rate for the first quarter of fiscal 1998 was 35 percent, compared to 25 percent in the first quarter of fiscal 1997.