Qualcomm Inc (QCOM)

[khemara_qc]

QUALCOMM today updated its financial guidance for the first fiscal quarter ending December 25, 2005.
SAN DIEGO, Dec. 8 /PRNewswire-FirstCall/


http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/12-08-2005/0004230335&....

The following statements are forward looking and actual results may differ
materially. Please see the description of certain risk factors in this
release and QUALCOMM's reports on file with the Securities and Exchange
Commission (SEC) for a more complete description of risks.

Pro Forma Defined
Pro forma results and guidance exclude the QUALCOMM Strategic Initiatives
(QSI) segment, estimated share-based compensation expense and tax benefits
related to prior years.

First Fiscal Quarter Business Outlook
Based on the current business outlook, we now anticipate first fiscal
quarter revenues for QUALCOMM pro forma to be at the high end of our prior
estimate of approximately $1.67 to $1.77 billion. We now anticipate first
fiscal quarter pro forma diluted earnings per share to be approximately
$0.38 to $0.39, compared to $0.28 in the year ago quarter. This estimate is
based on the shipment of approximately 47 million Mobile Station Modem (MSM)
chips during the quarter compared to approximately 39 million in the year ago
quarter and approximately 40 million in the prior quarter. We previously
anticipated first fiscal quarter pro forma diluted earnings per share to be
approximately $0.36 to $0.38 and estimated shipments of approximately 46 to
48 million MSM chips.
The majority of our licensees have reported royalties in the first fiscal
quarter for products shipped in the September quarter. Based on these
reports, and an estimate of the few licensees yet to report, we anticipate
September quarter shipments of approximately 52 million new CDMA/WCDMA units
at an average selling price of approximately $213 compared to our prior
estimate of approximately 51-53 million units at an average selling price of
approximately $206.
"Our updated guidance for the first fiscal quarter reflects higher handset
ASPs due primarily to strength in WCDMA handset shipments in Europe and a
positive mix in 1xEV-DO MSM chipsets," said Dr. Paul E. Jacobs, chief
executive officer of QUALCOMM. "Regionally we see strong demand for 1xEV-DO
products in North America, Japan and Korea. Our expectations for stronger
WCDMA demand in Europe appear to be materializing as well. We see several
European operators being particularly aggressive this holiday season with
their 3G offerings. In addition, we now anticipate operating expenses will be
modestly lower and investment income will be modestly higher than previously
expected for the first quarter."
The following table summarizes total QUALCOMM and QUALCOMM pro forma
results for the first fiscal quarter of 2005 and guidance based on the current
business outlook for the first fiscal quarter of 2006. The business outlook
for total QUALCOMM includes the effects of the Company's adoption of
SFAS No. 123R, Share-Based Payment (FAS 123R) in the first quarter of fiscal
2006, which requires the expensing of share-based payment programs. Total
QUALCOMM guidance for the first fiscal quarter of 2006 includes approximately
$0.04 diluted loss per share related to estimated share-based compensation
expense. Due to their nature, certain income and expense items such as
realized gains and losses in QSI, gains and losses on certain derivative
instruments or asset impairments cannot be accurately forecast. Accordingly,
the Company excludes such items from its business outlook, and actual results
may vary materially from the business outlook if the Company incurs any such
income or expense items.

The following estimates are approximations and are based on the current
business outlook:



Business Outlook Summary

FIRST QUARTER
Prior Guidance Current Guidance
Q1'05 Q1'06 Q1'06
Results Estimates Estimates
QUALCOMM Pro Forma
Revenues $1.39B $1.67B - $1.77B High end prior guidance
Year-over-year
change increase 20% - 27%
Diluted earnings
per share (EPS) $0.28 $0.36 - $0.38 $0.38 - $0.39
Year-over-year
change increase 29% - 36% increase 36% - 39%

Total QUALCOMM
Revenues $1.39B $1.67B - $1.77B High end prior guidance
Year-over-year
change increase 20% - 27%
Diluted earnings
per share (EPS) $0.30 $0.30 - $0.32 $0.32 - $0.33
Year-over-year
change increase 0% - 7% increase 7% - 10%
EPS attributable
to QSI $0.02 ($0.02) ($0.02)
EPS attributable
to share-based
compensation n/a ($0.04) ($0.04)

Metrics
MSM Shipments approx. 39M 46M - 48M 47M

CDMA/WCDMA
handset units
shipped approx. 40M* 51M - 53M* 52M*

CDMA/WCDMA
handset unit
wholesale
average
selling
price approx. $212* $206* $213*

*Shipments in Sept. quarter, reported in Dec. quarter



Second Fiscal Quarter Business Outlook
Consistent with our prior guidance, we continue to expect a sequential
decline of approximately $0.02-$0.03 in pro forma and total QUALCOMM diluted
earnings per share for the second fiscal quarter due primarily to seasonality
in product shipments and sequentially higher operating expenses.

QUALCOMM Incorporated (http://www.qualcomm.com) is a leader in developing and
delivering innovative digital wireless communications products and services
based on CDMA and other advanced technologies. Headquartered in San Diego,
California, QUALCOMM is included in the S&P 500 Index and is a 2005 FORTUNE
500(R) company traded on The Nasdaq Stock Market(R) under the ticker symbol
QCOM.

Note Regarding Use of Non-GAAP Financial Measures
Pro forma financial measurements are used by management to evaluate,
assess and benchmark the Company's operating results, and the Company believes
that pro forma reporting represents relevant and useful information that is
widely used by analysts, investors and other interested parties in its
industry. The Company presents pro forma financial information excluding the
QUALCOMM Strategic Initiatives (QSI) segment to facilitate evaluation of the
Company's ongoing core operating businesses, including QUALCOMM CDMA
Technologies (QCT), QUALCOMM Technology Licensing (QTL) and QUALCOMM Wireless
& Internet (QWI). QSI results relate to strategic investments for which the
Company has exit strategies of varying durations. Management believes that
the information excluding QSI presents a more representative view of the
operating and liquidity performance of the Company because it excludes the
effect of fluctuations in the values of investments that are unrelated to the
Company's operational performance.
The Company presents pro forma information excluding tax benefits related
to prior years to facilitate an understanding of its ongoing tax rate and
after tax earnings. The Company believes that this presentation is useful in
evaluating its performance on a consistent and comparable basis.
The Company presents pro forma financial information for fiscal 2006 that
excludes the estimate of share-based compensation under FAS 123R. The
Company's management uses pro forma financial measures excluding share-based
compensation to evaluate, assess and benchmark the Company's operating results
because share-based compensation is not an expense that requires or will
require cash payment by the Company. The Company believes that financial data
excluding the estimate of share-based compensation expense provides meaningful
information about the Company's ongoing core operating businesses. This
presentation is also useful to investors in evaluating performance on a basis
that is consistent and comparable with periods prior to the adoption of
FAS 123R in the first quarter of fiscal 2006.
The non-GAAP pro forma financial information presented herein should be
considered in addition to, not as a substitute for, or superior to, financial
measures calculated in accordance with GAAP. In addition, pro forma is not a
term defined by GAAP, and, as a result, the Company's measure of pro forma
results might be different than similarly titled measures used by other
companies. Reconciliations between total QUALCOMM results and QUALCOMM pro
forma results discussed in this release are presented herein.

Note Regarding Forward-Looking Statements
In addition to the historical information contained herein, this news
release contains forward-looking statements that are subject to risks and
uncertainties. Actual results may differ substantially from those referred to
herein due to a number of factors, including but not limited to risks
associated with: the rate of development, deployment and commercial acceptance
of CDMA based networks and CDMA based technology, including CDMA2000 1X,
1xEV-DO and WCDMA, both domestically and internationally; our dependence on
major customers and licensees; fluctuations in the demand for and price of
CDMA based products, services or applications; foreign currency fluctuations;
strategic loans, investments and transactions the Company has or may pursue;
gains or losses on derivative instruments or asset impairments; our dependence
on third party manufacturers and suppliers; our ability to maintain and
improve operational efficiencies and profitability; developments in current
and future litigation, as well as the other risks detailed from time-to-time
in the Company's SEC reports.

QUALCOMM(R), Mobile Station Modem(TM), MSM(TM) are trademarks and/or
service marks of QUALCOMM Incorporated. CDMA2000(R) is a registered trademark
of the Telecommunications Industry Association. All other trademarks are the
property of their respective owners.



Reconciliation of Non-GAAP Financial Measure Related to Prior Periods
(In millions, except per share data)

First Quarter - Fiscal Year 2005
Reconciling QUALCOMM Total
Segments QCT QTL QWI Items (1) Pro Forma QSI QUALCOMM
Revenues $865 $400 $159 $(34) $1,390 $-- $1,390
Earnings from
continuing
operations
before taxes 242 358 16 48 664 40 704
Net income 474 39 513
Diluted
earnings
per common
share $0.28 $0.02 $0.30
Shares used
in per share
calculations 1,704 1,704 1,704

(1) Reconciling items related to revenues consist primarily of other
non-reportable segment revenues less intersegment eliminations.
Reconciling items related to earnings before taxes consist primarily
of corporate expenses not allocated to the segments for management
reporting purposes, unallocated net investment income, non-reportable
segment results and the elimination of intercompany profit.



QUALCOMM Contact:
Bill Davidson, Investor Relations
Phone: [phone]
Email: [e-mail]
or
QUALCOMM Contact:
Jeremy James, Corporate Communications
Phone: [phone]
Email: [e-mail]



SOURCE QUALCOMM Incorporated
Web Site: http://www.qualcomm.com