Replies to post #16267 on Qualcomm Inc (QCOM)

[khemara_qc]

There is always FUDS, When QCOM is moving Up in price. Please see BS from MS below:

Qualcomm May Hit Earnings Speed Bump In 2007
Tom Van Riper, 03.08.06, 11:22 AM ET

http://www.forbes.com/2006/03/08/qualcomm-earnings-0308markets08.html?partner=yahootix

Qualcomm's sales and profits are up, but at what prices?

Shares of San Diego-based Qualcomm (nasdaq: QCOM - news - people ) were up Wednesday after the company raised its quarterly profit guidance to a range of 40 cents to 41 cents per share, from a previous range of 35 cents to 37 cents. The company, which also boosted its quarterly dividend 33%, cited higher-than-expected shipments of its wireless communication handsets during the December quarter. Qualcomm realizes handset sales over a one-quarter lag.

But Morgan Stanley tech analyst Louis Gerhardy isn't confident the good news will last. While he followed a number of other analysts in raising his 2006 outlook for Qualcomm by three cents per share, he also cut his 2007 projection by two cents, to $1.76 per share. That's because he sees evidence of inventory buildups and price softening that could leave sales revenue flat by next year.

"Chipset average selling prices appear to be coming in below our estimate as the company pushes into the very low end of the market," Gerhardy said in a research note.

The analyst said he's unconvinced that the products carry a high "price elasticity," meaning that lower prices don't necessarily spike more customer demand. A check of the sales channels, he said, suggest that inventory levels are inching higher.

Morgan Stanley has an "equal-weight" rating on Qualcomm. The research firm also has "equal-weight" ratings on Cypress Semiconductor (nyse: CY - news - people ), Maxim Integrated Products (nasdaq: MXIM - news - people ), Conexant Systems (nasdaq: CNXT - news - people ) and Intersil (nasdaq: ISIL - news - people ).