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: DaveMG who wrote (10143)	4/21/1998 10:45:00 PM
From: brian h	Respond to of 152472

DaveMG, My take is that QCOM still loses tons on infrastructure business as Gregg pointed out before. The overall margin on ASICs and handset sales and other businesses are merely offseting the loss on the infrastructure business. Therefore, licensing fees and royalty are such important factors for profitability at this stage. Remember QCOM's management mention that QCOM did not recognize any revenue from GSTRF's gateway revenue yet. It will be in Q3 and later. brian h.

To: DaveMG who wrote (10143)	4/22/1998 6:39:00 AM
From: JScurci	Read Replies (2) \| Respond to of 152472

Dear Brian, There's a lot to be happy about with this set of numbers. It's called the infrastructure business. We know communications systems revenues were down 8% sequentially but looking at the components that make up comm systems we know omnitracs was up, ASICs flat to up, handsets down, and infrastructure revenues up. Furthermore given the connector problems with the handset production and consequent need to rework finished goods and inventory of unsold phones, operating margins for handset division must have been fairly ugly given its higher costs atop lower revenues; a yet we learn that margins from comm systems declined only to 22% from 25% sequentially.That tells me that infrastructure losses (which were running upwards of 25Million/ qtr much of last year) are narrowing significantly. At this juncture, now that we know handset production problems with their associated costs are behind us and that hanset revenues will be rising with a more favorable model mix (new 800 Q phone),and that infrastructure will be higher still (Globalstar gateways plus maybe Mexico), the cocktail of higher revenues atop improved infrastructure and hanset margins looks fairly interesting. regards, John