Qualcomm Inc (QCOM)

[khemara_qc]

Motorola May Have 10% To 12% Near-Term Upside
12.13.04, 11:17 AM ET

http://www.forbes.com/markets/2004/12/13/1213automarketscan07.html?partner=yahoo&referrer=

Goldman Sachs maintained an "in-line" rating on Motorola (nyse: MOT - news - people ), saying the risks associated with a potential Sprint (nyse: FON - news - people ) and Nextel Communications (nasdaq: NXTL - news - people ) merger "are overblown." According to the research firm, investors are worried that a Sprint-Nextel merger poses a risk to the 9% of sales and 13% of operating income Motorola currently receives from Nextel. Goldman said Motorola would see little if any impact (approximately 2 cents per share) from such a deal in 2005, while 2006 risk would likely be offset by the performance of other lines of business. The research firm raised its 2005 earnings-per-share estimate on Motorola to 92 cents from 89 cents, citing improving margins in the handset and non-handset businesses. Motorola shares have a 10% to 12% upside in the near-term, Goldman Sachs said, adding that Motorola will need to mitigate near-term headwinds of $250 million to $400 million of operating income (or earnings per share of 6 cents to 10 cents) coming from a loss of royalty sharing from Qualcomm (nasdaq: QCOM - news - people ) and a potential lower sales run rate with Nextel.