BOSTON (07/20/2000) - Qualcomm Inc. on Wednesday reported pro forma net income of US$218 million, up 40 percent over the $156 million the wireless technology and equipment maker reported a year ago. The company met analyst expectations.
Qualcomm reported pro forma earnings per share of 27 cents, an increase of 23 percent over the 22 cents per share posted in the third quarter of fiscal 1999, the company said in a statement Wednesday. The earnings hit the mark set by a consensus estimate of 19 analysts polled by First Call/Thomson Financial.
Qualcomm had exceeded analyst expectations each previous quarter for the last two years.
The company's third quarter ended June 30, the same day that Qualcomm announced plans to lay off some 200 workers in the U.S., or not quite 3 percent of its total work force, to streamline operations and boost competitiveness. Two days before announcing the layoffs, Qualcomm said that its chipset sales might be lower than expected in the fourth fiscal quarter because of a drop in South Korean phone sales, owing to the end of phone subsidies there. The company said then that it didn't expect that news to affect its third-quarter pro forma financial report. [See "Qualcomm: Layoffs Unrelated to Korean Slowdown," June 30. ]In its third-quarter report, Qualcomm posted earnings of $714 million, an 11 percent increase on a pro forma basis, over $645 million recorded in the same quarter last year. The third quarter of this fiscal year ended June 30. Pro forma earnings before taxes were $352 million, a 47 percent increase, compared to $239 million in the third quarter of fiscal 1999.
Qualcomm's pro forma results exclude $64 million in acquisition-related goodwill and other assets and $7 million in payroll taxes on stock option exercises for employees, the company said.
The company's chip business met its third-quarter goal, shipping a record number of MSM (mobile station modem) phone chips, and also invested in new growth areas, according to the statement.
The company owns several patents on CDMA (code division multiple access) technology, which is a wireless data transmission protocol used, in part, to give devices like cell phones the potential to connect to the Internet. The company manufactures third-generation CDMA chips and collects royalties from several other companies that do as well.
Company shares rose more than 10 percent Monday after news that Qualcomm's disputed CDMA patents had been upheld by Japanese and European patent offices.
The patents were challenged by six other vendors, including Nokia Corp., L.M.
Ericsson Telephone Co. and Nippon Telegraph and Telephone Corp. [See "Qualcomm CDMA Patents Upheld in Japan, Europe," July 18. ]Qualcomm stock was trading down Thursday afternoon at $61.15 per share, compared to Wednesday's closing price of $63. Qualcomm released its financial results after the market closed on Wednesday.
Qualcomm, in San Diego, California, can be reached at +1-619-587-1121 or at http://www.qualcomm.com/.