Qualcomm Inc (QCOM)

[khemara_qc]

Global Growth of 3G CDMA Aids Qualcomm

23rd April , 2004



US : QUALCOMM Incorporated announced its second quarter fiscal 2004 results ended March 28, 2004. Revenues were $1.2 billion in the second quarter of fiscal 2004, up one percent sequentially and 20 percent year-over-year. The second quarter fiscal 2004 net income was $488 million and diluted earnings per share were $0.58, up 39 percent and 35 percent sequentially and 374 percent and 346 percent year-over-year, respectively.

The second quarter fiscal 2004 net income excluding the QSI segment was $442 million, up six percent sequentially and 41 percent year-over-year. The second quarter fiscal 2004 diluted earnings per share excluding the QSI segment were $0.53, up four percent sequentially and 39 percent year-over-year.

In this quarter we disposed of all remaining operations and assets related to the Vesper Operating Companies and TowerCo. In accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," their results of operations and cash flows are presented as discontinued operations within the QSI segment. Our statements of operations and cash flows for prior periods have been adjusted to reflect this.

"Our financial results reflect the strong acceptance and rapid global growth of 3G CDMA," said Dr. Irwin Mark Jacobs, chairman and CEO of QUALCOMM. "Consumers and enterprises increasingly recognize the benefits of CDMA-based networks, with the number of subscribers now exceeding 200 million. Early 3G CDMA entrants continue to perform well. KDDI, the first CDMA operator in Japan, announced its sixth consecutive month as the leading Japanese operator in net subscriber additions, and now has approximately 14 million subscribers on its 3G network. Better coverage and new handsets have accelerated WCDMA (UMTS)uptake and resulted in over 4 million cumulative subscribers in Japan and Europe at the end of the quarter. NTT DoCoMo, the largest Japanese operator, added approximately 724,000 subscribers to its 3G FOMA network in March 2004, for a total of over three million WCDMA subscribers. In South Korea, local number portability and compelling 1xEV-DO handsets contributed to the highest monthly net additions in two years and a 1xEV-DO base that now exceeds 6.4 million subscribers. The United States CDMA market continues to grow, benefiting from local number portability and the popularity of camera phones and color screens. Finally, we experienced continued growth in China and India and strong growth in Brazil, propelled by low-priced MSM6000-based entry level phones.

"This quarter, we matched the prior quarter's record high by shipping approximately 32 million MSM phone chips; however, worldwide demand for our chipsets exceeded our supply, particularly the MSM5100 and MSM5500. We anticipate supply to better align with demand over the course of the next two quarters.

"Research and development continued at high levels. Both the CDMA2000 1X Revision D and the 1xEV-DO Revision A standards were completed, each supporting peak data rates of 3.1 Mbps on the forward link and 1.8 Mbps on the reverse link. We publicly demonstrated CDMA2000 1xEV-DO Gold Multicast, allowing multimedia content to be sent simultaneously to many users; MediaFLO, an end-to-end product and service delivering multiple channels of video conveniently accessed by an on-screen channel guide; and Quality-of-Service features supporting greatly enhanced performance for Voice-over-Internet Protocol (VOIP), push-to-chat, and video telephony. We believe these and other projects will drive further expansion of 3G CDMA, subscriber migration from 2G systems, and higher revenues."

Revenues for the second quarter of fiscal 2004 grew $199 million compared to the second quarter of fiscal 2003, including a $130 million increase in QUALCOMM Technology Licensing (QTL) segment revenues and a $65 million increase in QUALCOMM CDMA Technologies (QCT) segment revenues. QTL revenues increased over the prior year due primarily to greater phone and infrastructure equipment sales by our licensees. In the second quarter of fiscal 2004, our licensees reported CDMA phone sales for the first quarter of fiscal 2004 of approximately 37 million units, compared to 27 million units in the second quarter of fiscal 2003. QCT sold approximately 32 million Mobile Station Modem (TM) (MSM(TM)) phone chips in the second quarter of fiscal 2004, compared to 28 million in the second quarter of fiscal 2003.

http://www.3g.co.uk/PR/April2004/6978.htm