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

To: slacker711 who wrote (31044)	5/26/1999 10:21:00 AM
From: Caxton Rhodes	Read Replies (2) \| Respond to of 152472

The Q is down big right now, -4. Buying op, while margin calls start coming. Caxton

To: slacker711 who wrote (31044)	5/26/1999 12:34:00 PM
From: slacker711	Respond to of 152472

It seems to me that the market still hasnt discounted last quarter's stellar earnings report. Unless i am missing something a btb of 1.7 should have a HUGE impact on the upcoming quarter's earnings. Predicting earnings is not my strong suit but i decided to run through the numbers. I did two scenarios, one in which they managed to reduce their backorder by half and the other in which they were able to catch up completely. Obviously my numbers are based on a bunch of assumptions 1) The ASP of an ASIC is $25 and the GM's are 57% (both from Lehman) 2) The Q books royalties based on ASIC's sold. I used an approximation suggested by Clark (in a prior post) that half of last quarter's ASIC sales and half of this quarter's were likely used to calculate the royalties (no idea how accurate this is, but i think it will get us in the ball park) 3) Operating expenses last quarter were 203m which was approximately 22% of revenues. I'm assuming that this will increase about 25m in this quarter based on having over 1b in revenues. 4) Last quarter wasnt an anomoly. I'm using the pro-forma number of 60 cents as my baseline. 5) The biggest assupmtion i am using is that the btb of 1.7 wasnt a fluke but rather indicative of a trend. I have no idea what the ordering patterns for most handset manufacturers is....Hopefully the Q's management wouldnt have emphasized the number unless it meant something. Q3 1.35 1.7 # of ASIC'S sold 12.15m 15.3m increase over Q2 3.15m 6.3m $ per ASIC $25.00 $25.00 Rev. inc. over Q2 $78.75m $157.50m Gross Margins 57% 57% Gross Prof. inc over q2 $44.89m $89.78m Royalties 116.325m 133.65m Inc in Roy. Vs q2 39.325m 56.65m Total inc in GP $84.21m $146.43m Inc in oper. Exp. $25.00m $25.00m Total inc in oper Inc. $59.21m $121.43m Tax Rate 35% 35% inc. in Net Income $38.49m $78.93m # of shares 160m 160m inc in EPS $0.24 $0.49 Looking over these numbers i'm not sure if these will mean much to anyone else (i think i need to take an accounting class) but if i'm anywhere in the ballpark, earnings between $.84 and $1.09 wouldnt be too bad :-)....and i havent even touched the handset division or Globalstar. Any feedback is welcome... Slacker