Qualcomm Announces Third Quarter Fiscal 2010 Results

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22nd July 2010, 09:25am - Views: 819






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MEDIA RELEASE PR40539


Qualcomm Announces Third Quarter Fiscal 2010 Results


SAN DIEGO, July 22 /PRNewswire-AsiaNet/ --


                       Revenues $2.7 Billion, EPS $0.47


                              Pro Forma EPS $0.57


             Reports Record MSM Shipments; Raises Financial Guidance


    Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator

of advanced wireless technologies, products and services, today announced

results for the third quarter of fiscal 2010 ended June 27, 2010.


    "Our financial performance this quarter exceeded our prior expectations,

driven by record MSM chipset shipments, favorable product mix and continued

strong demand for 3G devices around the world," said Dr. Paul E. Jacobs,

chairman and CEO of Qualcomm. "Looking forward, we continue to see healthy

CDMA-based device growth of approximately 23 percent in calendar year 2010,

and are raising both our revenue and earnings guidance for the fiscal year."


    Third Quarter Results (GAAP)


    - Revenues: $2.71 billion, down 2 percent year-over-year and up 2 percent

      sequentially.

    - Operating income: $792 million, down 11 percent year-over-year and up 2

      percent sequentially.

    - Net income: $767 million, up 4 percent year-over-year and down 1

      percent sequentially.

    - Diluted earnings per share: $0.47, up 7 percent year-over-year and 2

      percent sequentially.

    - Effective tax rate: 21 percent for the quarter.

    - Operating cash flow: $951 million, down 13 percent year-over-year; 35

      percent of revenues.

    - Return of capital to stockholders: $1.49 billion, including $309

      million, or $0.19 per share, of cash dividends paid, and $1.18 billion

      to repurchase 32.4 million shares of our common stock.


    Pro Forma Third Quarter Results

    Pro forma results exclude the Qualcomm Strategic Initiatives (QSI)

segment, certain share-based compensation, certain tax items that are not

related to the current year and acquired in-process research and development

(R&D) expense.


    - Revenues: $2.70 billion, down 2 percent year-over-year and up 1 percent

      sequentially.

    - Operating income: $991 million, down 12 percent year-over-year and 7

      percent sequentially.

    - Net income: $936 million, up 4 percent year-over-year and down 5

      percent sequentially.

    - Diluted earnings per share: $0.57, up 6 percent year-over-year and down

      3 percent sequentially. The current quarter excludes $0.07 loss per

      share attributable to certain share-based compensation and $0.03 loss

      per share attributable to certain tax items.

    - Effective tax rate: 19 percent for the quarter.

    - Free cash flow: $954 million, down 8 percent year-over-year; 35 percent

      of revenues (defined as net cash from operating activities less capital

      expenditures).


    Detailed reconciliations between results reported in accordance with

generally accepted accounting principles (GAAP) and pro forma results are

included at the end of this news release.


    Third Quarter Key Business Metrics

    - CDMA-based Mobile Station Modem(TM) (MSM(TM)) shipments: approximately

      103 million units, up 10 percent year-over-year and 11 percent

      sequentially.

    - March quarter total reported device sales: approximately $25.2 billion,

      up 19 percent year-over-year and down 9 percent sequentially.


      -- March quarter estimated CDMA-based device shipments: approximately

         134 to 138 million units at an estimated average selling price of

         approximately $183 to $189 per unit.


    Cash and Marketable Securities

    Our cash, cash equivalents and marketable securities totaled

approximately $17.6 billion at the end of the third quarter of fiscal 2010,

compared to $18.2 billion at the end of the second quarter of fiscal 2010 and

$15.7 billion a year ago. On July 8, 2010, we announced a cash dividend of

$0.19 per share payable on September 24, 2010 to stockholders of record as of

August 27, 2010.


    Research and Development

    

     ($ in millions)                       Share-Based  In-Process  

                              Pro Forma   Compensation     R&D    QSI   GAAP

                               ---------  ------------     ---    ---   ----

    Third quarter fiscal 2010    $546          $74          $-    $29   $649

    As a % of revenues             20%                            N/M     24%

    Third quarter fiscal 2009    $523          $72          $-    $23   $618

    As a % of revenues             19%                            N/M     22%

    Year-over-year change ($)       4%           3%        N/M     26%     5%

    

    N/M -Not Meaningful


    Pro forma R&D expenses increased 4 percent year-over-year, primarily due

to an increase in costs related to the development of integrated circuit

products, next-generation CDMA and OFDMA technologies, and other initiatives

to support the acceleration of advanced wireless products and services. QSI

R&D expenses were primarily related to our FLO TV(TM) subsidiary.


    Selling, General and Administrative

    

    ($ in millions)                            Share-Based   

                                 Pro Forma    Compensation     QSI     GAAP

                                 ---------    ------------     ---     ----

    Third quarter fiscal 2010       $321           $65        $(26)    $360

    As a % of revenues                12%                      N/M       13%

    Third quarter fiscal 2009       $285           $68         $24     $377

    As a % of revenues                10%                      N/M       14%

    Year-over-year change ($)         13%           (4%)      (208%)     (5%)


    Pro forma selling, general and administrative (SG&A) expenses increased

13 percent year-over-year primarily due to an increase in patent-related

costs. Third quarter fiscal 2010 QSI SG&A expenses included a $62 million

gain on the sale of our Australia spectrum license. Other QSI SG&A expenses

increased by $12 million primarily due to selling and marketing expenses

related to FLO TV.


    Effective Income Tax Rate

    Our fiscal 2010 effective income tax rates are estimated to be

approximately 20 percent for GAAP and approximately 20 to 21 percent for pro

forma. Our estimate of the fiscal 2010 GAAP effective tax rate includes tax

expense of approximately $130 million that arises because deferred revenue

related to the 2008 license and settlement agreements with Nokia is taxable

in fiscal 2010, but the resulting deferred tax asset will reverse in future

years when our state tax rate will be lower as a result of California tax

legislation enacted in 2009. During the third quarter of fiscal 2010, we

recorded $20 million of tax expense as a result of prior year tax audits

completed during the third fiscal quarter. The tax expense related to these

items was excluded from our pro forma results to provide a clearer

understanding of our ongoing tax rate and after tax earnings.


    Qualcomm Strategic Initiatives

    The QSI segment is composed of our strategic investments, including FLO

TV and the Broadband Wireless Access (BWA) spectrum recently won in the

auction in India. GAAP results for the third quarter of fiscal 2010 included

a net loss of $4 million for the QSI segment. The third quarter of fiscal

2010 QSI results included $118 million in operating expenses, primarily

related to FLO TV, partially offset by a $62 million gain on the sale of our

Australia spectrum license. In June 2010, in connection with the India BWA

spectrum purchase, we entered into a bank loan agreement that is payable in

full in Indian rupees in December 2010. At the end of the third quarter of

fiscal 2010, the carrying value of the loan was $1.06 billion.


    Business Outlook

    The following statements are forward looking and actual results may

differ materially. The "Note Regarding Forward-Looking Statements" at the end

of this news release provides a description of certain risks that we face,

and our annual and quarterly reports on file with the Securities and Exchange

Commission (SEC) provide a more complete description of risks.


    Our outlook does not include provisions for the consequences of

injunctions, damages or fines related to any pending legal matters unless

awarded or imposed by a court, governmental entity or other regulatory body.

In addition, due to their nature, certain income and expense items, such as

realized investment gains or losses, gains and losses on certain derivative

instruments or asset impairments, cannot be accurately forecast. Accordingly,

we exclude forecasts of such items from our business outlook, and actual

results may vary materially from the business outlook if we incur any such

income or expense items.


    The following table summarizes GAAP and pro forma guidance based on the

current business outlook. The pro forma business outlook presented below is

consistent with the presentation of pro forma results elsewhere herein.


    The following estimates are approximations and are based on the current

business outlook:


                           Qualcomm's Business Outlook Summary

    

    FOURTH FISCAL QUARTER

    ---------------------

                                              Q4 FY09       Current Guidance

                                              Results      Q4 FY10 Estimates

                                              -------      -----------------

      Pro Forma

      Revenues                                 $2.68B         $2.67B - $2.93B

        Year-over-year change                              even - increase 9%

      Diluted earnings per share

       (EPS)                                    $0.48          $0.55 - $0.59

        Year-over-year change                              increase 15% - 23%

    

    

      GAAP

      Revenues                                 $2.69B         $2.67B - $2.93B

                                                               decrease 1% -

        Year-over-year change                                     increase 9%

      Diluted EPS                               $0.48          $0.39 - $0.43

        Year-over-year change                              decrease 10% - 19%

      Diluted EPS attributable to

       QSI                                     ($0.05)                ($0.07)

      Diluted EPS attributable to

       share-based compensation                ($0.05)                ($0.07)

      Diluted EPS attributable to

       certain tax items (1)                    $0.09                 ($0.02)

    

    

      Metrics

      MSM shipment                         approx. 91M    approx. 106M - 111M

        Year-over-year change                              increase 16% - 22%

      Total reported device sales

       (2)                                      $24.9B*      $26.5B - $28.5B*

      Est. CDMA-based devices           

       shipped (2)                   approx. 120M-124M*         not provided

      Est. CDMA-based device

       average selling price (2)    approx. $200-$206*          not provided

      *Est. sales in June quarter,

       reported in September

       quarter

    

    

    FISCAL YEAR

    -----------

    

                                              Prior             Current

                                             Guidance          Guidance

                             FY 2009          FY 2010            FY 2010

                              Results        Estimates           Estimates

                              -------        ---------           ---------

      Pro Forma

      Revenues                 $10.39B    $10.4B - $11.0B     $10.7B - $11.0B

        Year-over-year change           even -increase 6%    increase 3% - 6%

      Diluted EPS               $1.31      $2.21 - $2.32       $2.33 - $2.37

        Year-over-year                       

         change                        increase 69% - 77%  increase 78% - 81%

    

    

      GAAP

      Revenues                 $10.42B    $10.4B - $11.0B     $10.7B - $11.0B

        Year-over-year change           even -increase 6%    increase 3% - 6%

      Diluted EPS               $0.95      $1.71 - $1.82       $1.82 - $1.86

        Year-over-year                       

         change                        increase 80% - 92%  increase 92% - 96%

      Diluted EPS

       attributable to QSI     ($0.15)            ($0.15)             ($0.15)

      Diluted EPS

       attributable to

       share-based

       compensation            ($0.27)            ($0.27)             ($0.27)

      Diluted EPS

       attributable to

       certain tax items(1)     $0.07             ($0.08)             ($0.09)

    

    

      Metrics

      Est. fiscal year*

       CDMA-based device

       average selling          approx.            approx.           approx. 

       price range (2)       $202 - $208        $182 - $188       $184 - $188

    

     *Shipments in Sept. to June quarters, reported in Dec. to Sept. quarters

      -------------------

    

    

    CALENDAR YEAR Device Estimates (2)

    ----------------------------------

                                                 Prior             Current

                                               Guidance            Guidance

                            Calendar 2009    Calendar 2010      Calendar 2010

                              Estimates        Estimates          Estimates

                              ---------        ---------          ---------

      Est. CDMA-based

       device shipments


      March quarter       approx. 106M-110M   not provided  approx. 134M-138M

      June quarter        approx. 120M-124M   not provided       not provided

      September quarter   approx. 126M-130M   not provided       not provided

      December quarter    approx. 148M-152M   not provided       not provided

      ----------------    -----------------   ------------       ------------

      Est. Calendar year

       range (approx.)          500M - 516M    600M - 650M        600M - 650M

      ------------------        -----------    -----------        -----------

                                  Midpoint       Midpoint           Midpoint

      Est. total CDMA-based

       units                   approx. 508M   approx. 625M       approx. 625M

      Est. CDMA units          approx. 213M   approx. 236M       approx. 236M

      Est. WCDMA units         approx. 295M   approx. 389M       approx. 389M

      ----------------         ------------   ------------       ------------

    

    

    

    (1)  The estimate of our fiscal 2010 GAAP effective tax rate includes

         tax expense of approximately $130 million that arises because

         deferred revenue related to the 2008 license and settlement

         agreements with Nokia is taxable in fiscal 2010 but the resulting

         deferred tax asset will reverse in future years when our state tax

         rate will be lower as a result of California tax legislation enacted

         in 2009.

    (2)  Total reported device sales is the sum of all reported sales in

         U.S. dollars (as reported to us by our licensees) of all licensed

         CDMA-based subscriber devices (including handsets, modules, modem

         cards and other subscriber devices) by our licensees during a

         particular period.  The reported quarterly estimated ranges of ASPs

         and unit shipments are determined based on the information as

         reported to us by our licensees during the relevant period and our

         own estimates of the selling prices and unit shipments for licensees

         that do not provide such information.  Not all licensees report

         sales, selling prices and/or unit shipments the same (e.g., some

         licensees report selling prices net of permitted deductions, such as

         transportation, insurance and packing costs, while other licensees

         report selling prices and then identify the amount of permitted

         deductions in their reports), and the way in which licensees report

         such information may change from time to time.  Total reported

         device sales, estimated unit shipments and estimated ASPs for a

         particular period may include prior period activity that is reported

         with the activity for the particular period.  For results using

         assumptions in effect for quarters prior to the second quarter of

         fiscal 2010, please refer to the "Changes to QTL Metrics" table of

         our April 21, 2010 earnings release that was furnished to the

         Securities and Exchange Commission on Form 8-K.


    Results of Business Segments (in millions, except per share data):

    

                                                    Pro Forma   

                                                    Reconciling         

                                                      Items      Pro Forma

    SEGMENTS               QCT      QTL     QWI        (1)(5)       (5)

    --------               ---      ---     ---        -----      ------

    Q3 - FISCAL 2010

    ----------------

    Revenues             $1,691    $847    $162            $-     $2,700

      Change from prior

       year                  (5%)     5%      9%          N/M         (2%)

      Change from prior

       quarter               10%    (13%)     7%          N/M          1%

    Operating income

     (loss)                                                         $991

      Change from prior

       year                                                          (12%)

      Change from prior

       quarter                                                        (7%)

    EBT                    $404    $673      $6           $78     $1,161

      Change from prior

       year                 (26%)     2%    N/M           N/M         (3%)

      Change from prior

       quarter               17%   (18%)    N/M           N/M         (8%)

    EBT as a % of

     revenues                24%     79%      4%          N/M         43%

    Net income (loss)                                               $936

      Change from prior

       year                                                            4%

      Change from prior

       quarter                                                        (5%)

    Diluted EPS                                                    $0.57

      Change from prior

       year                                                            6%

      Change from prior

       quarter                                                        (3%)

    Diluted shares used                                            1,642

    

    

                            Share-                  In-      

                            Based          Tax    Process  

    SEGMENTS            Compensation(2)   Items(3)  R&D     QSI(4)   GAAP(5)

    --------            ---------------   -------   ----    -----    ------

    Q3 - FISCAL 2010

    ----------------

    Revenues                      $-         $-       $-      $6    $2,706

      Change from prior

       year                                                  (33%)      (2%)

      Change from prior

       quarter                                               200%        2%

    Operating income

     (loss)                    ($149)        $-       $-    ($50)     $792

      Change from prior

       year                        1%                N/A      35%      (11%)

      Change from prior

       quarter                     3%                N/M      62%        2%

    EBT                        ($149)        $-       $-    ($41)     $971

      Change from prior

       year                        1%                N/A      38%       (1%)

      Change from prior

       quarter                     3%                N/M      70%        1%

    EBT as a % of

     revenues                    N/M                 N/M     N/M        36%

    Net income (loss)          ($111)      ($54)      $-     ($4)     $767

      Change from prior

       year                       13%       N/A      N/A      90%        4%

      Change from prior

       quarter                  (13%)       N/M      N/M      95%      (1%)

    Diluted EPS               ($0.07)    ($0.03)      $-      $-     $0.47

      Change from prior

       year                       13%       N/A      N/A     N/M         7%

      Change from prior

       quarter                  (17%)       N/M      N/M     N/M         2%

    Diluted shares used        1,642      1,642    1,642   1,642     1,642

    

    

    

                                                     Pro Forma   

                                                    Reconciling         

                                                      Items      Pro Forma

    SEGMENTS               QCT      QTL     QWI        (1)(5)       (5)

    --------               ---      ---     ---        -----      ------

    Q2 - FISCAL 2010

    ----------------

    Revenues             $1,537    $974    $152           ($2)    $2,661

    Operating income

     (loss)                                                        1,065

    EBT                     344     821      (1)           94      1,258

    Net income (loss)                                                989

    Diluted EPS                                                    $0.59

    Diluted shares used                                            1,678

    

    

                            Share-                  In-      

                            Based          Tax    Process  

    SEGMENTS            Compensation(2)   Items(3)  R&D     QSI(4)   GAAP(5)

    --------            ---------------   -------   ----    -----    ------

    Q2 - FISCAL 2010

    ----------------

    Revenues                      $-         $-       $-      $2    $2,663

    Operating income

     (loss)                     (154)         -       (3)   (132)      776

    EBT                         (154)         -       (3)   (136)      965

    Net income (loss)            (98)       (33)      (3)    (81)      774

    Diluted EPS               ($0.06)    ($0.02)      $-  ($0.05)    $0.46

    Diluted shares used        1,678      1,678    1,678   1,678     1,678

    

    

    

                                                    Pro Forma   

                                                    Reconciling         

                                                      Items      Pro Forma

    SEGMENTS               QCT      QTL     QWI        (1)(5)       (5)

    --------               ---      ---     ---        -----      ------

    Q3 - FISCAL 2009

    ----------------

    Revenues             $1,786    $807    $148            $3     $2,744

    Operating income

     (loss)                                                        1,122

    EBT                     548     663      (3)           (7)     1,201

    Net income (loss)                                                903

    Diluted EPS                                                    $0.54

    Diluted shares used                                            1,675

    

    

                            Share-                  In-      

                            Based          Tax    Process  

    SEGMENTS            Compensation(2)   Items(3)  R&D     QSI(4)   GAAP(5)

    --------            ---------------   -------   ----    -----    ------

    Q3 - FISCAL 2009

    ----------------

    Revenues                      $-         $-       $-      $9    $2,753

    Operating income

     (loss)                     (151)         -        -     (77)      894

    EBT                         (151)         -        -     (66)      984

    Net income (loss)           (127)         -        -     (39)      737

    Diluted EPS               ($0.08)        $-       $-  ($0.02)    $0.44

    Diluted shares used        1,675      1,675    1,675   1,675     1,675

    

    

    

                                                    Pro Forma   

                                                    Reconciling         

                                                      Items      Pro Forma

    SEGMENTS               QCT      QTL     QWI        (1)(5)       (5)

    --------               ---      ---     ---        -----      ------

    Q4 - FISCAL 2009

    ----------------

    Revenues             $1,699    $837    $146            $1     $2,683

    Operating income

     (loss)                                                          831

    EBT                     508     693      (5)         (211)       985

    Net income (loss)                                                811

    Diluted EPS                                                    $0.48

    Diluted shares used                                            1,688

    

    

                            Share-                  In-

                           

Based          Tax    Process

    SEGMENTS            Compensation(2)   Items(3)  R&D     QSI(4)   GAAP(5)

    --------            ---------------   -------   ----    -----    ------

    Q4 - FISCAL 2009

    ----------------

    Revenues                      $-         $-       $-      $7    $2,690

    Operating income

     (loss)                     (148)         -        -     (86)      597

    EBT                         (148)         -        -     (95)      742

    Net income (loss)            (85)       155        -     (78)      803

    Diluted EPS               ($0.05)     $0.09       $-  ($0.05)    $0.48

    Diluted shares used        1,688      1,688    1,688   1,688     1,688

    

    

    

                                                    Pro Forma   

                                                    Reconciling         

                                                       Items     Pro Forma

    SEGMENTS               QCT      QTL     QWI        (1)(5)       (5)

   

--------               ---      ---     ---        -----      ------

    9 MONTHS -FISCAL

     2010

    ----------------

    Revenues             $4,835  $2,738    $456            $1     $8,030

      Change from prior

       year                   9%     (1%)    (8%)         N/M          4%

    Operating income

     (loss)                                                       $3,189

      Change from prior

       year                                                           37%

    EBT                  $1,173  $2,266     $14          $274     $3,727

      Change from prior

       year                  26%    (5%)    (44%)         N/M         83%

    Net income (loss)                                             $2,967

      Change from prior

       year                                                          116%

    Diluted EPS                                                    $1.78

      Change from prior

       year                                                          117%

    Diluted shares used                                            1,670

    

    

                            Share-                  In-      

                            Based          Tax    Process  

    SEGMENTS            Compensation(2)   Items(3)  R&D     QSI(4)   GAAP(5)

    --------            ---------------   -------   ----    -----    ------

    9 MONTHS -FISCAL

     2010

    ----------------

    Revenues                      $-         $-       $-      $9    $8,039

      Change from prior

       year                                                  (59%)       4%

    Operating income

     (loss)                    ($453)        $-      ($3)  ($286)   $2,447

      Change from prior

       year                       (4%)               N/M     (14%)      50%

    EBT                        ($453)        $-      ($3)  ($283)   $2,988

      Change from prior

       year                       (4%)               N/M      (6%)     124%

    Net income (loss)          ($322)     ($119)     ($3)  ($141)   $2,382

      Change from prior

       year                       13%       N/M      N/M      19%      202%

    Diluted EPS               ($0.19)    ($0.07)      $-  ($0.08)    $1.43

      Change from prior

       year                       14%       N/M      N/M      20%      204%

    Diluted shares used        1,670      1,670    1,670   1,670     1,670

    

    

    

                                                    Pro Forma   

                                                    Reconciling         

                                                      Items      Pro Forma

    SEGMENTS               QCT      QTL     QWI        (1)(5)       (5)

    --------               ---      ---     ---        -----      ------

    9 MONTHS -FISCAL

     2009

    ----------------

    Revenues             $4,436  $2,769    $494            $5     $7,704

    Operating income

     (loss)                                                        2,323

    EBT                     933   2,376      25        (1,292)     2,042

    Net income (loss)                                              1,376

    Diluted EPS                                                    $0.82

    Diluted shares used                                            1,668

    

    

                            Share-                  In-      

                            Based          Tax    Process  

    SEGMENTS            Compensation(2)   Items(3)  R&D     QSI(4)   GAAP(5)

    --------            ---------------   -------   ----    -----    ------

    9 MONTHS -FISCAL

     2009

    ----------------

    Revenues                      $-         $-       $-     $22    $7,726

    Operating income

     (loss)                     (436)         -       (6)   (251)    1,630

    EBT                         (436)         -       (6)   (266)    1,334

    Net income (loss)           (370)       (36)      (6)   (174)      790

    Diluted EPS               ($0.22)    ($0.02)      $-  ($0.10)    $0.47

    Diluted shares used        1,668      1,668    1,668   1,668     1,668

    

    

    

                                                    Pro Forma   

                                                    Reconciling         

                                                      Items      Pro Forma

    SEGMENTS               QCT      QTL     QWI        (1)(5)       (5)

    --------               ---      ---     ---        -----      ------

    FISCAL YEAR 2009

    ----------------

    Revenues             $6,135  $3,605    $641            $6    $10,387

    Operating income

     (loss)                                                        3,153

    EBT                   1,441   3,068      20        (1,502)     3,027

    Net income (loss)                                              2,187

    Diluted EPS                                                    $1.31

    Diluted shares used                                            1,673

    -------------------                                            -----

    

    

                            Share-                  In-      

                            Based          Tax    Process  

    SEGMENTS            Compensation(2)   Items(3)  R&D     QSI(4)   GAAP(5)

    --------            ---------------   -------   ----    -----    ------

    FISCAL YEAR 2009

    ----------------

    Revenues                      $-         $-       $-     $29   $10,416

    Operating income

     (loss)                     (584)         -       (6)   (337)    2,226

    EBT                         (584)         -       (6)   (361)    2,076

    Net income (loss)           (455)       118       (6)   (252)    1,592

    Diluted EPS               ($0.27)     $0.07       $-  ($0.15)    $0.95

    Diluted shares used        1,673      1,673    1,673   1,673     1,673

    -------------------        -----      -----    -----   -----     -----

    

    

    

    

    

    (1)  Pro forma reconciling items related to revenues consist

         primarily of other nonreportable segment revenues less intersegment

         eliminations.  Pro forma reconciling items related to earnings

         before taxes consist primarily of certain investment income or

         losses, research and development expenses, sales and marketing

         expenses and other operating expenses that are not allocated to the

         segments for management reporting purposes, nonreportable segment

         results and the elimination of intersegment profit.

    (2)  Certain share-based compensation is included in operating

         expenses as part of employee-related costs but is not allocated to

         the Company's segments as such costs are not considered relevant by

         management in evaluating segment performance.

    (3)  During the first, second and third quarters of fiscal 2010, the

         Company recorded $32 million, $33 million and $32 million in state

         tax expense, respectively, or $0.02 diluted loss per share for each

         quarter, that arises because deferred revenue related to the license

         and settlement agreements with Nokia is taxable in fiscal 2010 but

         the resulting deferred tax asset will reverse in future years when

         the Company's state tax rate will be lower. During the third quarter

         of fiscal 2010, the Company recorded $22 million of tax expense, or

         $0.01 diluted loss per share, as a result of prior year tax audits

         completed during the third quarter.

    (4)  At fiscal year-end, the sum of the quarterly tax provisions for

         each column, including QSI, equals the annual tax provisions for

         each column computed in accordance with GAAP.  In interim quarters,

         the tax provision for the QSI operating segment is computed by

         subtracting the pro forma tax provision, the tax items column and

         the tax provision related to share-based compensation from the GAAP

         tax provision.

Business Company Qualcomm Incorporated 3 image

    (5)  Fiscal 2009 results included a $783 million charge related to a

         litigation settlement and patent agreement with Broadcom

         Corporation, including $748 million recorded in the second quarter

         of fiscal 2009 and $35 million recorded in the fourth quarter of

         2009.  The fourth quarter of fiscal 2009 results also included a

         $230 million charge related to a fine that had been announced by the

         Korea Fair Trade Commission.


    N/M - Not Meaningful


    Sums may not equal totals due to rounding.



    Conference Call

    Qualcomm's third quarter fiscal 2010 earnings conference call will be

broadcast live on July 21, 2010 beginning at 1:45 p.m. Pacific Time (PT) on

the Company's web site at: www.qualcomm.com. This conference call may contain

forward-looking financial information and will include a discussion of

"non-GAAP financial measures" as that term is defined in Regulation G. The

most directly comparable GAAP financial measures and information reconciling

these non-GAAP financial measures to the Company's financial results prepared

in accordance with GAAP, as well as the other material financial and

statistical information to be discussed in the conference call, will be

posted on the Company's Investor Relations web site at www.qualcomm.com

immediately prior to commencement of the call. A taped audio replay will be

available via telephone on July 21, 2010, beginning at approximately 5:30

p.m. PT through August 21, 2010 at 9:00 p.m. PT. To listen to the replay,

U.S. callers may dial +1-800-642-1687 and international callers may dial

+1-706-645-9291. U.S. and international callers should use reservation number

83946397. An audio replay of the conference call will be available on the

Company's web site at www.qualcomm.com following the live call.


    Editor's Note: To view the web slides that accompany this earnings

release and conference call, please go to the Qualcomm Investor Relations



    Qualcomm Incorporated (Nasdaq: QCOM) is the world leader in

next-generation mobile technologies. For 25 years, Qualcomm ideas and

inventions have driven the evolution of wireless communications, connecting

people more closely to information, entertainment and each other. Today,

Qualcomm technologies are powering the convergence of mobile communications

and consumer electronics, making wireless devices and services more personal,

affordable and accessible to people everywhere. For more information, please



    Note Regarding Use of Non-GAAP Financial Measures

    The Company presents pro forma financial information that is used by

management (i) to evaluate, assess and benchmark the Company's operating

results on a consistent and comparable basis; (ii) to measure the performance

and efficiency of the Company's ongoing core operating businesses, including

the Qualcomm CDMA Technologies, Qualcomm Technology Licensing and Qualcomm

Wireless & Internet segments; and (iii) to compare the performance and

efficiency of these segments against each other and against competitors

outside the Company. Pro forma measurements of the following financial data

are used by the Company's management: revenues, R&D expenses, SG&A expenses,

total operating expenses, operating income (loss), net investment income

(loss), income (loss) before income taxes, effective tax rate, net income

(loss), diluted earnings (loss) per share, operating cash flow and free cash

flow. Management is able to assess what it believes is a more meaningful and

comparable set of financial performance measures for the Company and its

business segments by using pro forma information. As a result, management

compensation decisions and the review of executive compensation by the

Compensation Committee of the Board of Directors focus primarily on pro forma

financial measures applicable to the Company and its business segments.


    Pro forma information used by management excludes the QSI segment,

certain share-based compensation, certain tax items and acquired in-process

R&D. The QSI segment is excluded because the Company expects to exit its

strategic investments at various times, and the effects of fluctuations in

the value of such investments are viewed by management as unrelated to the

Company's operational performance. Share-based compensation, other than

amounts related to share-based awards granted under a bonus program that may

result in the issuance of unrestricted shares of the Company's common stock,

is excluded because management views such share-based compensation as

unrelated to the Company's operational performance. Further, share-based

compensation related to stock options is affected by factors that are subject

to change, including the Company's stock price, stock market volatility,

expected option life, risk-free interest rates and expected dividend payouts

in future years. Certain tax items that were recorded in reported earnings in

each fiscal year presented, but were unrelated to the fiscal year in which

they were recorded, are excluded in order to provide a clearer understanding

of the Company's ongoing pro forma tax rate and after tax earnings. Acquired

in-process R&D is excluded because such expense is viewed by management as

unrelated to the operating activities of the Company's ongoing core

businesses.


    The Company presents free cash flow, defined as net cash provided by

operating activities less capital expenditures, to facilitate an

understanding of the amount of cash flow generated that is available to grow

its business and to create long-term shareholder value. The Company believes

that this presentation is useful in evaluating its operating performance and

financial strength. In addition, management uses this measure to evaluate the

Company's performance, to value the Company and to compare its operating

performance with other companies in the industry.


    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 GAAP results and pro forma results 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 deployment and adoption of, and demand for, our

technologies in wireless networks and of wireless communications, equipment

and services, including CDMA2000 1X, 1xEV-DO, WCDMA, HSPA, TD-SCDMA and OFDMA

both domestically and internationally; the uncertainty of global economic

conditions and its potential impact on demand for our products, services or

applications and the value of our marketable securities; attacks on our

business model, including results of current and future litigation and

arbitration proceedings, as well as actions of governmental or

quasi-governmental bodies, and the costs we incur in connection therewith,

including potentially damaged relationships with customers and operators who

may be impacted by the results of these proceedings; our dependence on major

customers and licensees; our dependence on third-party manufacturers and

suppliers; our ability to maintain and improve operational efficiencies and

profitability; foreign currency fluctuations; strategic investments and

transactions we have or may pursue; the development, deployment and

commercial acceptance of the FLO TV network and MediaFLO(TM) technology; the

development and commercial acceptance of the mirasol(R) display technology;

as well as the other risks detailed from time-to-time in our SEC reports,

including the report on Form 10-K for the year ended September 27, 2009 and

most recent Form 10-Q. The Company undertakes no obligation to update, or

continue to provide information with respect to, any forward-looking

statement or risk factor, whether as a result of new information, future

events or otherwise.


    Qualcomm is a registered trademark of Qualcomm Incorporated. FLO TV and

MediaFLO are trademarks of Qualcomm Incorporated. mirasol is a registered

trademark of Qualcomm MEMS Technologies, Inc. CDMA2000 is a registered

trademark of the Telecommunications Industry Association (TIA USA). All other

trademarks are the property of their respective owners.


    Qualcomm Contact:

    Warren Kneeshaw

    Phone: +1-858-658-4813

    e-mail: ir@qualcomm.com





                       Qualcomm Incorporated

               CONSOLIDATED STATEMENTS OF OPERATIONS

     This schedule is to assist the reader in reconciling from

                 Pro Forma results to GAAP results

               (In millions, except per share data)

                            (Unaudited)

    

                                    Three Months Ended June 27, 2010

                                    --------------------------------

                                       Share-               

                           Pro         Based         Tax     

                          Forma     Compensation    Items    QSI      GAAP

                         ------     ------------    -----    ---      ----

    Revenues:

      Equipment

       and

       services           $1,766        $-           $-       $6    $1,772

      Licensing

       and

       royalty

       fees                  934         -            -        -       934

        Total

         revenues          2,700         -            -        6     2,706

                           -----       ---          ---      ---     -----

    Operating

    

expenses:

      Cost

       of equipment

       and services

       revenues              842        10            -       53       905

      Research

       and

       development           546        74            -       29       649

      Selling,

       general and

       administrative        321        65            -      (26)      360

        Total operating

         expenses          1,709       149            -       56     1,914

                           -----       ---          ---      ---     -----

    

    Operating

     income (loss)           991      (149)           -      (50)      792

    

    Investment

     income (loss),

     net                     170(a)      -            -        9(b)    179

                             ---       ---          ---      ---       ---

        Income

         (loss) before

         income taxes      1,161      (149)           -      (41)      971

    Income

     tax (expense)

     benefit                (225)(c)    38(h)       (54)(e)   37(d)  (204)(c)

                            ====       ===          ===      ===      ====

        Net income

         (loss)             $936     $(111)        $(54)     $(4)     $767

                            ====     =====         ====      ===      ====

    

    Earnings (loss)

     per common

     share:

      Diluted              $0.57    $(0.07)      $(0.03)  $(0.00)    $0.47

                           =====    ======       ======   ======     =====

    

    Shares used

     in per

     share

     calculations:

      Diluted              1,642     1,642        1,642    1,642     1,642

                           =====     =====        =====    =====     =====

    

    

    Supplemental

     Financial

     Data:

     ------------

    Operating Cash

     Flow                 $1,051       $(3)(g)       $-     $(97)     $951

    Operating Cash

     Flow as a % of

     Revenues                 39%                            N/M        35%

    Free Cash

     Flow (f)               $954       $(3)(g)       $-    $(117)     $834

    Free Cash

     Flow as a % of

     Revenues                 35%                            N/M        31%

    

    

    

    

    

    

    (a)  Included $127 million in interest and dividend income related to

         cash, cash equivalents and marketable securities, which were not

         part of the Company's strategic investment portfolio, and $78

         million in net realized gains on investments, partially offset by

         $28 million in other-than-temporary losses on investments, $5

         million in interest expense and $2 million in losses on derivatives.

    (b)  Included $14 million in net realized gains on investments, $4

         million in interest and dividend income related to cash, cash

         equivalents and marketable securities and $1 million in equity in

         earnings of investees, partially offset by $9 million in interest

         expense and $1 million in other-than-temporary losses on

         investments.

    (c)  The third quarter of fiscal 2010 effective tax rates were 21%

         for GAAP and 19% for pro forma.

    (d)  At fiscal year-end, the sum of the quarterly tax provisions for

         each column, including QSI, equals the annual tax provisions for

         each column computed in accordance with GAAP.  In interim quarters,

         the tax provision for the QSI operating segment is computed by

         subtracting the pro forma tax provision, the tax items column and

         the tax provision related to share-based compensation from the GAAP

         tax provision.

    (e)  During the third quarter of fiscal 2010, the Company recorded

         (i) a $32 million state tax expense, or $0.02 diluted loss per

         share, that arises because deferred revenue related to the license

         and settlement agreements with Nokia is taxable in fiscal 2010 but

         the resulting deferred tax asset will reverse in future years when

         the Company's state tax rate will be lower, and (ii) a $22 million

         tax expense, or $0.01 diluted loss per share, as a result of prior

         year tax audits completed during the third quarter of fiscal 2010.

    (f)  Free Cash Flow is calculated as net cash provided by operating

         activities less capital expenditures.  Reconciliation of these

         amounts is included in the Reconciliation of Pro Forma Free Cash

         Flows to Net Cash Provided by Operating Activities (GAAP) and other

         supplemental disclosures for the three months ended June 27, 2010,

         included herein.

    (g)  Incremental tax benefits from stock options exercised during the

         period.

    (h)  The third quarter of fiscal 2010 tax benefit related to share-

         based compensation includes a $2 million tax benefit as a result of

         prior year tax audits completed during the third quarter of fiscal

         2010.


                       Qualcomm Incorporated

               CONSOLIDATED STATEMENTS OF OPERATIONS

     This schedule is to assist the reader in reconciling from

                 Pro Forma results to GAAP results

               (In millions, except per share data)

                            (Unaudited)

    

                                        Nine Months Ended June 27, 2010

                                        -------------------------------

                                                  Share-Based       

                                   Pro Forma     Compensation       Tax Items

                                   ---------     ------------       ---------

    Revenues:

      Equipment and services         $5,021              $-             $-

      Licensing and royalty fees      3,009               -              -

          Total revenues              8,030               -              -

                                      -----             ---            ---

    Operating expenses:

      Cost of equipment and

       services revenues              2,345              30              -

      Research and development        1,594             221              -

      Selling, general and

       administrative                   902             202              -

         Total operating expenses     4,841             453              -

                                      -----             ---            ---

    

    Operating income (loss)           3,189            (453)             -

    

    Investment income (loss), net       538(a)            -              -

                                        ---             ---            ---

         Income (loss) before

          income taxes                3,727            (453)             -

    Income tax (expense) benefit       (760)(c)         131(h)        (119)(e)

                                       ----             ---           ----

         Net income (loss)           $2,967           $(322)         $(119)

                                     ======           =====          =====

    

    Earnings (loss) per common

     share:

      Diluted                         $1.78          $(0.19)        $(0.07)

                                      =====          ======         ======

    

    Shares used in per share

     calculations:

       Diluted                        1,670           1,670          1,670

                                      =====           =====          =====

    

    

    Supplemental Financial Data:

    ---------------------------

    Operating Cash Flow              $3,297            $(34)(g)         $-

    Operating Cash Flow as a %

     of Revenues                         41%

    Free Cash Flow (f)               $3,048            $(34)(g)         $-

    Free Cash Flow as a % of

     Revenues                            38%

    

    

                                         Nine Months Ended June 27, 2010

                                         -------------------------------

                                      In-Process        

                                         R&D            QSI           GAAP

                                         ---            ---           ----

    Revenues:

      Equipment and services             $-              $9         $5,030

      Licensing and royalty fees          -               -          3,009

          Total revenues                  -               9          8,039

                                        ---             ---          -----

    Operating expenses:

      Cost of equipment and

       services revenues                  -             154          2,529

      Research and development            3              74          1,892

      Selling, general and

       administrative                     -              67          1,171

          Total operating expenses        3             295          5,592

                                        ---             ---          -----

    

    Operating income (loss)              (3)           (286)         2,447

    

    Investment income (loss), net         -               3(b)         541

                                        ---             ---            ---

         Income (loss) before

          income taxes                   (3)           (283)         2,988

    Income tax (expense) benefit          -             142(d)       (606)(c)

                                        ---             ---           ----

         Net income (loss)              $(3)          $(141)        $2,382

                                        ===           =====         ======

    

    Earnings (loss) per common

     share:

       Diluted                       $(0.00)         $(0.08)         $1.43

                                     ======          ======          =====

    

    Shares used in per share

     calculations:

       Diluted                        1,670           1,670          1,670

                                      =====           =====          =====

    

    

    Supplemental Financial Data:

    ----------------------------

    Operating Cash Flow                  $-           $(280)        $2,983

    Operating Cash Flow as a %

     of Revenues                                        N/M             37%

    Free Cash Flow (f)                   $-           $(344)        $2,670

    Free Cash Flow as a % of

     Revenues                                           N/M             33%

    

    

    

    

    (a)  Included $401 million in interest and dividend income related to

         cash, cash equivalents and marketable securities, which were not

         part of the Company's strategic investment portfolio, and $249

         million in net realized gains on investments, partially offset by

         $94 million in other-than-temporary losses on investments, $15

         million in interest expense and $3 million in losses on derivatives.

    (b)  Included $25 million in net realized gains on investments and $4

         million in interest and dividend income related to cash, cash

         equivalents and marketable securities, partially offset by $15

         million in interest expense, $8 million in other-than-temporary

         losses on investments and $3 million in equity in losses of

         investees.

    (c)  The effective tax rates for the first nine months of fiscal 2010

         were 20% for both GAAP and pro forma.

    (d)  At fiscal year-end, the sum of the quarterly tax provisions for

         each column, including QSI, equals the annual tax provisions for

         each column computed in accordance with GAAP.  In interim quarters,

         the tax provision for the QSI operating segment is computed by

         subtracting the pro forma tax provision, the tax items column and

         the tax provision related to share-based compensation from the GAAP

         tax provision.

    (e)  During the first nine months of fiscal 2010, the Company

         recorded (i) a $97 million state tax expense, or $0.06 diluted loss

         per share, that arises because deferred revenue related to the

         license and settlement agreements with Nokia is taxable in fiscal

         2010 but the resulting deferred tax asset will reverse in future

         years when the Company's state tax rate will be lower, and (ii) a

         $22 million tax expense, or $0.01 diluted loss per share, as a

         result of prior year tax audits completed during the third quarter

         of fiscal 2010.

    (f)  Free Cash Flow is calculated as net cash provided by operating

         activities less capital expenditures.  Reconciliation of these

         amounts is included in the Reconciliation of Pro Forma Free Cash

         Flows to Net Cash Provided by Operating Activities (GAAP) and other

         supplemental disclosures for the nine months ended June 27, 2010,

         included herein.

    (g)  Incremental tax benefits from stock options exercised during the

         period.

    (h)  The first nine months of fiscal 2010 tax benefit related to

         share-based compensation includes a $2 million tax benefit as a

         result of prior year tax audits completed during the third quarter

         of fiscal 2010.

    

    

    

    

    

                            Qualcomm Incorporated

                Reconciliation of Pro Forma Free Cash Flows to

                Net Cash Provided by Operating Activities (GAAP)

                     and other supplemental disclosures

                                (In millions)

                                 (Unaudited)

    

                                        Three Months Ended June 27, 2010

                                        --------------------------------

                                                    Share-Based         Tax

                                   Pro Forma       Compensation        Items

                                   ---------       ------------        -----

    Net cash provided (used) by

     operating activities            $1,051            $(3)(a)           $-

    Less:  capital expenditures         (97)             -                -

                                        ---            ---              ---

      Free cash flow                   $954            $(3)              $-

                                       ====            ===              ===

    

    Other supplemental cash

     disclosures:

       Cash transfers from QSI (1)     $104             $-               $-

       Cash transfers to QSI (2)       (133)             -                -

                                       ----            ---              ---

         Net cash transfers            $(29)            $-               $-

                                       ====            ===              ===

    

    

                                      Three Months Ended June 27, 2010

                                      --------------------------------

                                     In-Process         

                                         R&D           QSI             GAAP

                                         ---           ---             ----

    Net cash provided (used) by

     operating activities                $-           $(97)            $951

    Less:  capital expenditures           -            (20)            (117)

                                        ---            ---             ----

      Free cash flow                     $-          $(117)            $834

                                        ===          =====             ====

    

    Other supplemental cash

     disclosures:

       Cash transfers from QSI (1)       $-          $(104)              $-

       Cash transfers to QSI (2)          -            133                -

                                        ---            ---              ---

         Net cash transfers              $-            $29               $-

                                        ===            ===              ===

    

    

                                         Nine Months Ended June 27, 2010

                                         -------------------------------

                                                    Share-Based         Tax

                                   Pro Forma       Compensation        Items

                                   ---------       ------------        -----

    Net cash provided (used) by

     operating activities            $3,297           $(34)(a)           $-

    Less:  capital expenditures        (249)             -                -

                                       ----            ---              ---

      Free cash flow                 $3,048           $(34)              $-

                                     ======           ====              ===

    

    Other supplemental cash

     disclosures:

       Cash transfers from QSI (1)     $117             $-               $-

       Cash transfers to QSI (2)       (376)             -                -

                                       ----            ---              ---

         Net cash transfers           $(259)            $-               $-

                                      =====            ===              ===

    

    

                                      Nine Months Ended June 27, 2010

                                      -------------------------------

                                     In-Process         

                                         R&D           QSI             GAAP

                                         ---           ---             ----

    Net cash provided (used) by

     operating activities                $-          $(280)          $2,983

    Less:  capital expenditures           -            (64)            (313)

                                        ---            ---             ----

      Free cash flow                     $-          $(344)          $2,670

                                        ===          =====           ======

    

    Other supplemental cash

     disclosures:

       Cash transfers from QSI (1)       $-          $(117)              $-

       Cash transfers to QSI (2)          -            376                -

                                        ---            ---              ---

         Net cash transfers              $-           $259               $-

                                        ===           ====              ===

    

    (1)  Cash from sale of equity investments and Australia spectrum license.

    (2)  Funding for strategic debt and equity investments, capital

         expenditures and other QSI operating expenses.

    

    

    

    

    

    

                                       Three Months Ended June 28, 2009

                                       -------------------------------

                                                    Share-Based         Tax

                                   Pro Forma       Compensation        Items

                                   ---------       ------------        -----

    Net cash provided (used) by

     operating activities            $1,157          $(22)(a)            $-

    Less:  capital expenditures        (118)            -                 -

      Free cash flow                 $1,039          $(22)               $-

    

    

                                       Three Months Ended June 28, 2009

                                       --------------------------------

                                     In-Process         

                                         R&D           QSI             GAAP

                                         ---           ---             ----

    Net cash provided (used) by

     operating activities                $-           $(48)          $1,087

    Less:  capital expenditures           -            (31)            (149)

      Free cash flow                     $-           $(79)            $938

    

    

                                        Nine Months Ended June 28, 2009

                                        -------------------------------

                                                    Share-Based         Tax

                                   Pro Forma       Compensation        Items

                                   ---------       ------------        -----

    Net cash provided (used) by

     operating activities            $6,145           $(54)(a)           $-

    Less:  capital expenditures        (533)             -                -

      Free cash flow                 $5,612           $(54)              $-

    

    

                                        Nine Months Ended June 28, 2009

                                        -------------------------------

                                     In-Process         

                                         R&D           QSI             GAAP

                                         ---           ---             ----

    Net cash provided (used) by

     operating activities                $-          $(240)          $5,851

    Less:  capital expenditures           -            (84)            (617)

      Free cash flow                     $-          $(324)          $5,234

    

    (a) Incremental tax benefits from stock options exercised during the

        period.

    

    

    

    

    

                               Qualcomm Incorporated

                       CONDENSED CONSOLIDATED BALANCE SHEETS

                        (In millions, except per share data)

                                     (Unaudited)

    

                                     ASSETS

    

                                                     June 27,   September 27,

                                                        2010            2009

                                                        ----            ----

    Current assets:

      Cash and cash equivalents                       $2,541          $2,717

      Marketable securities                            7,427           8,352

      Accounts receivable, net                           798             700

      Inventories                                        446             453

      Deferred tax assets                                213             149

      Other current assets                               189             199

                                                         ---             ---

              Total current assets                    11,614          12,570

    Marketable securities                              7,618           6,673

    Deferred tax assets                                1,774             843

    Property, plant and equipment, net                 2,382           2,387

    Goodwill                                           1,476           1,492

    Other intangible assets, net                       3,040           3,065

    Other assets                                       1,497             415

                                                       -----             ---

              Total assets                           $29,401         $27,445

                                                     =======         =======

    

                     LIABILITIES AND STOCKHOLDERS' EQUITY


    Current liabilities:

    

      Trade accounts payable                            $640            $636

     

Payroll and other benefits related

       liabilities                                       433             480

      Unearned revenues                                  601             441

      Loan payable to banks                            1,061               -

      Income taxes payable                             1,135              29

      Other current liabilities                        1,320           1,227

                                                       -----           -----

             Total current liabilities                 5,190           2,813

    Unearned revenues                                  3,587           3,464

    Other liabilities                                    738             852

                                                         ---             ---

             Total liabilities                         9,515           7,129

                                                       -----           -----

    

    

    Stockholders' equity:

      Preferred stock, $0.0001 par value; issuable

       in series;

        8 shares authorized; none outstanding at

        June 27, 2010 and September 27, 2009               -               -

      Common stock, $0.0001 par value; 6,000 shares

       authorized;

        1,609 and 1,669 shares issued and outstanding

        at June 27, 2010 and September 27, 2009,

        respectively                                       -               -

      Paid-in capital                                  6,611           8,493

      Retained earnings                               12,746          11,235

      Accumulated other comprehensive income             529             588

                                                         ---             ---

             Total stockholders' equity               19,886          20,316

                                                      ------          ------

             Total liabilities and stockholders'

              equity                                 $29,401         $27,445

                                                     =======         =======

    

    

    

    

                             Qualcomm Incorporated

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                      (In millions, except per share data)

                                  (Unaudited)

    

                                       Three Months Ended   Nine Months Ended

                                       ------------------   -----------------

                                        June 27,  June 28,  June 27, June 28,

                                           2010      2009      2010     2009

                                           ----      ----     ----      ----

    

    Revenues:

      Equipment and services             $1,772    $1,862    $5,030   $4,698

      Licensing and royalty fees            934       891     3,009    3,028

                                            ---       ---     -----    -----

      Total revenues                      2,706     2,753     8,039    7,726

                                         

-----     -----     -----    -----

    

    Operating expenses:

      Cost of equipment and

       services revenues                    905       864     2,529    2,357

      Research and development              649       618     1,892    1,826

      Selling, general and

       administrative                       360       377     1,171    1,165

      Litigation settlement,

       patent license

        and other related items               -         -         -      748

                                            ---       ---       ---      ---

          Total operating expenses        1,914     1,859     5,592    6,096

                                          -----     -----     -----    -----

    

    Operating income                        792       894     2,447    1,630

    

    Investment income (loss),

     net                                    179        90       541     (296)

                                            ---       ---       ---     ----

           Income before income taxes       971       984     2,988    1,334

    Income tax expense                     (204)     (247)     (606)    (544)

                                           ----      ----      ----     ----

           Net income                      $767      $737    $2,382     $790

                                           ====      ====    ======     ====

    

    Basic earnings per common

     share                                $0.47     $0.45     $1.44    $0.48

                                          =====     =====     =====    =====

    Diluted earnings per common

     share                                $0.47     $0.44     $1.43    $0.47

                                          =====     =====     =====    =====

    

    Shares used in per share

     calculations:

       Basic                              1,629     1,656     1,654    1,653

                                          =====     =====     =====    =====

       Diluted                            1,642     1,675     1,670    1,668

                                          =====     =====     =====    =====

    

    Dividends per share paid              $0.19     $0.17     $0.53    $0.49

                                          =====     =====     =====    =====

   

Dividends per share

     announced                            $0.19     $0.17     $0.53    $0.49

                                          =====     =====     =====    =====

    

    

    

    

    

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  (In millions)

                                   (Unaudited)

    

                                  Three Months Ended     Nine Months Ended

                                  ------------------     -----------------

                                    June 27,  June 28,   June 27,  June 28,

                                      2010       2009        2010      2009

                                      ----       ----        ----      ----

    Operating Activities:

    Net income                        $767       $737     $2,382      $790

    Adjustments to reconcile

     net income to net cash

     provided by

           operating activities:

       Depreciation and

        amortization                   166        154        495       460

       Revenues related to non-

        monetary exchanges             (31)       (29)       (99)      (86)

       Income tax provision in

        excess of income tax

        payments                        86         56         80       222

       Non-cash portion of

        share-based

        compensation expense           149        151        453       436

       Incremental tax benefit

        from stock options

        exercised                       (3)       (22)       (34)      (54)

       Net realized gains on

        marketable securities

        and other investments          (92)       (90)      (274)      (57)

       Impairment losses on

        marketable securities

        and other investments           29        116        102       717

       Other items, net                (66)        (1)       (70)      (22)

    Changes in assets and

     liabilities, net of

     effects of acquisitions:

        Accounts receivable, net      (126)      (133)       (91)    2,691

        Inventories                    (45)        30          7       143

        Other assets                    (1)        13        (71)      (17)

        Trade accounts payable         104         95         23        (8)

        Payroll, benefits and

         other liabilities              78         27       (161)      737

        Unearned revenues              (64)       (17)       241      (101)

                                       ---        ---        ---      ----

        Net cash provided by

         operating activities          951      1,087      2,983     5,851

                                       ---      -----      -----     -----

    Investing Activities:

      Capital expenditures            (117)      (149)      (313)     (617)

     

Advance payment on

       spectrum                     (1,064)         -     (1,064)        -

      Purchases of available-

       for-sale securities          (2,569)    (2,201)    (7,049)   (6,497)

Business Company Qualcomm Incorporated 4 image

      Proceeds from sale of

       available-for-sale

       securities                    3,113      1,145      7,354     3,606

      Cash received for partial

       settlement of investment

       receivables                       -         32         33       349

      Other investments and

       acquisitions, net of

       cash acquired                   (17)        (7)       (45)      (47)

      Change in collateral held

       under securities lending          -          -          -       173

      Other items, net                  85          -         88         6

                                       ---        ---        ---       ---

        Net cash used by

         investing activities         (569)    (1,180)      (996)   (3,027)

                                      ----     ------       ----    ------

    Financing Activities:

      Borrowing under loan

       payable to banks              1,064          -      1,064         -

      Proceeds from issuance of

       common stock                     35        175        519       276

      Incremental tax benefit

       from stock options

       exercised                         3         22         34        54

      Repurchase and retirement

       of common stock              (1,178)         -     (2,893)     (285)

      Dividends paid                  (309)      (282)      (872)     (810)

      Change in obligations

       under securities lending          -          -          -      (173)

      Other items, net                  (1)         3         (2)        -

                                       ---        ---        ---       ---

        Net cash used by

         financing activities         (386)       (82)    (2,150)     (938)

                                      ----        ---     ------      ----

      Effect of exchange rate

       changes on cash                  (8)         4        (13)       (5)

                                       ---        ---        ---       ---

      Net (decrease) increase

       in cash and cash

       equivalents                     (12)      (171)      (176)    1,881

    Cash and cash equivalents

     at beginning of period          2,553      3,892      2,717     1,840

                                     -----      -----      -----     -----

      Cash and cash equivalents

       at end of period             $2,541     $3,721     $2,541    $3,721

                                    ======     ======     ======    ======


SOURCE: Qualcomm Incorporated


    CONTACT: Warren Kneeshaw of Qualcomm Incorporated, 

             +1-858-658-4813, 

             ir@qualcomm.com


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