Qualcomm Inc (QCOM)

[khemara_qc]

Qualcomm A 'Core Tech Holding'
07.21.05, 9:00 AM ET

http://www.forbes.com/markets/2005/07/21/qualcomm-wireless-earnings-0721markets02.html?partner=yahoo....

Banc of America Securities maintained a "buy" rating and $40 price target on Qualcomm (nasdaq: QCOM - news - people ) after the company posted strong fiscal third-quarter earnings.

"We are encouraged by the strong performance in a challenging industry backdrop. June quarter results were only slightly better than expected, but guidance was positive, allaying our fears that there may be a reduction coming."

Qualcomm's strong third quarter was "primarily from a higher March handset units with a higher-than-expected average selling prices (ASPs) because of strength in Japan, slightly lower-than-anticipated operating expenses and a lower-than-expected share count."

The research firm stressed that average selling prices are the story for the company. "ASPs were 8% higher than our expectations at $231, and offset slightly lower units. We expect ASPs to remain resilient over the next few years as 3G ramps up."

"We see Qualcomm as a core technology holding since there is a clear secular driver that will lead to accelerating earnings-per-share growth. We look for more rapid 3G adoption to drive EPS and the stock higher," said the research outfit.

Elsewhere in its coverage of wireless equipment, Banc of America's top picks are Nokia (nyse: NOK - news - people ) and Cisco Systems (nasdaq: CSCO - news - people ), both rated at "buy" with price targets of $23 and $24, respectively. Its least favorites are Lucent Technologies (nyse: LU - news - people ) and Ciena (nasdaq: CIEN - news - people ), both rated at "neutral" with price targets of $3 and $2.50, respectively.