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

To: Sawtooth who wrote (21701)	1/20/1999 4:20:00 PM
From: Keith Feral	Read Replies (1) \| Respond to of 152472

Comments on financial performance for the quarter. This was the first time the company has posted an operating profit 2 quarters in a row. The gross margin was down a bit from the previous quarter because QCOM did not deliver infra to Pegaso this quarter. The only infra buildout is limited to Tijuana, from what I could gather on the conference call. That leaves QCOM with a lot of infra to deliver to Mexico over the next 2 years. The marginal increase in revenues was the result of higher phone volumes (at stable ASP's) offsetting weak infra. That resulted in a net gain of $14 million from Comm Sys from last quarter. Remarkably, the company held it's gross margin to 28%, reinforcing mgmt's positive comments about improvements in handset margins - now in the 20's. Honestly, now that the cat is out of the bag, I think it is a little late to get much more negative on infra. I'm sure mgmt will have the division up and running sooner than we think. Calls for a sale are competely mystifying to me. You can not stay competitive in the handset game if you are not staying on the cutting edge of technology in infra. Not to mention, we have a noose around WCDMA neck for royalties and potential JV contracts. The key to everything is signing an agreement with ERICY so that people can get better visibility for next generation infra, handsets, chipsets, & royalties. I hope that next quarter we will see rev's resume growth with the return of infra in Russia, Brazil, & Mexico. Hopefully, with the eye on cost cutting & the pickup in business this quarter, we can see the gross margins shoot up to the mid 30's. Overall, the quarter was anything but a surprise. The results were excellent, considering weak infra. I think the stock will act better soon with CTIA & other major events coming up for QCOM. The pdQ is coming into focus and it would be great to see the product start shipping this quarter. I am very excited to see the next generation handsets. I think the show is in New Orleans this year. Good luck to all.