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: w molloy who wrote (27973)	4/21/1999 5:11:00 PM
From: Ruffian	Read Replies (2) \| Respond to of 152472

Bloomberg> Qualcomm Surges as 2nd-Qtr Earnings Beat Estimates San Diego, April 21 (Bloomberg) -- Qualcomm Inc. shares surged 39 percent to a record after the cellular-phone maker's fiscal second-quarter profit beat forecasts, and analysts said they will raise earnings estimates for the next two years. Qualcomm rose 54 7/16 to 195 1/16, the stock's biggest-ever one-day gain. Shares have more than tripled this year after bouncing between 35 and 70 from mid-1995 until three months ago. The recent rally boosted the company's market value to $13.9 billion. Profit in the quarter ended March 28 rose threefold to 82 cents a share, beating estimates of 59 cents, on soaring demand for Qualcomm's phones and the semiconductors that run them. The company expects earnings to rise further as more cellular operators worldwide adopt its standard for new digital networks and it sheds its unprofitable network-equipment business. ''The market growth has really taken off beyond their expectations,'' said Timothy Luke, an analyst at Lehman Brothers Inc., who rates Qualcomm ''strong buy.'' Network Business The company would have earned $1.20 a share excluding the network business, which it agreed last month to sell to Swedish rival Ericsson AB. Qualcomm forecast earnings in future quarters to match or beat that. San Diego-based Qualcomm expects to complete the sale to Ericsson next month, and analysts are raising their estimates to exclude the network business losses. The network-equipment division contributed only $24 million of the company's $932.4 million in sales in the second quarter and cut per-share profit by 38 cents, or about a third, the company said. Qualcomm is benefiting as more cellular companies adopt its technology, known as code-division multiple access. CDMA provides more capacity than competing digital cellular standards and is considered more efficient for data services that let users send and receive e-mail and browse the Internet. ''They are significantly overperforming,'' said Pete Peterson, an analyst at Volpe Brown Whelan & Co., who rates Qualcomm ''buy.'' ''We should see upward revisions in earnings expectations and stock price.'' Qualcomm is expected to earn 71 cents a share in the fiscal third quarter, $2.75 for fiscal 1999 and $3.76 for fiscal 2000, according to First Call Corp. Those estimates include the network business. Support Qualcomm got a boost last month, when rival Ericsson, the world's No. 3 cell-phone maker, agreed to support Qualcomm's technology. Analysts said the agreement will boost royalty payments to Qualcomm, which will also still make phones and computer chips for the systems. That means profit will soar, analysts said. ''Royalty revenues fall straight to the bottom line,'' said Mark McKechnie, an analyst at NationsBanc Montgomery Securities. Already, Qualcomm said it's experiencing strong demand for CDMA in North America and South Korea and rising demand in Latin America, especially Brazil. Demand also is rising in Japan. The company also expects two cellular providers in China, the largest potential market, to build CDMA networks. Record Surge The last time Qualcomm shares rose more than 30 percent in a day was Sept. 30, 1992, when U S West Inc. said it would be the world's first phone company to buy a CDMA system. Profit from operations for the fiscal second quarter rose to $65.2 million, or 82 cents a share, from $18.6 million, or 25 cents, a year earlier. Including a charge of $107.8 million, or $1.41 a share, for a restructuring and the sale of its cellular-network business, Qualcomm had a loss of $42.6 million, or 59 cents a share. In the 1998 second quarter, including a gain of $7.4 million, or 11 cents a share, for a tax benefit for research and development, Qualcomm had net income of $26 million, or 36 cents a share. Apr/21/1999 16:18