MEDIA RELEASE PR38910
Qualcomm Raises Financial Guidance for the Second Fiscal Quarter of 2010
SAN DIEGO, Mar. 25 /PRNewswire-AsiaNet/ --
Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator
of advanced wireless technologies, products and services, today updated its
financial guidance for the second fiscal quarter ending March 28, 2010.
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.
"We are very pleased with our stronger than expected performance this
quarter with both the licensing and chipset businesses projecting higher
revenues versus our prior guidance," said Dr. Paul E. Jacobs, chairman and
CEO of Qualcomm. "We now project earnings per share to be well above the high
end of our prior guidance driven by strength in licensing revenues and
favorable volume and product mix in our chipset business."
Pro Forma Defined
Pro forma results and guidance 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.
Second Fiscal Quarter Business Outlook Highlights
The following estimates are based on the current business outlook:
- Revenues: estimated to be $2.55 to $2.65 billion compared to
our prior guidance range of $2.40 to $2.60 billion.
- Diluted earnings per share: estimated to be $0.56 to $0.58 pro
forma, compared to our prior guidance range of $0.49 to $0.53; and
estimated to be $0.42 to $0.44 in accordance with generally accepted
accounting principles (GAAP), compared to our prior guidance range of
$0.35 to $0.39.
- CDMA-based Mobile Station Modem(TM) (MSM(TM)) shipments:
estimated to be approximately 92 to 93 million units compared to our
prior guidance range of 88 to 92 million units.
We are not updating or reaffirming our prior estimates of licensee
shipment volumes or average selling prices for CDMA devices in the fourth
quarter of 2009, as we have not completed the analysis of all the information
necessary to update this guidance. In addition, given changing market
dynamics, we are evaluating changes to the information we provide to help
investors evaluate Qualcomm's licensing business.
The following table summarizes GAAP and pro forma guidance for the second
fiscal quarter of 2010 based on the current business outlook. The pro forma
business outlook provided below is presented 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
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SECOND FISCAL QUARTER
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Current
Guidance
Q2 FY09 Prior Guidance Q2 FY10
Results (2) Q2 FY10 Estimates Estimates
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Pro Forma
Revenues $2.45B $2.40B - $2.60B $2.55B - $2.65B
Year-over- decrease 2% -increase 6% increase 4% - 8%
year change
Diluted earnings
Per share (EPS) ($0.03) $0.49 - $0.53 $0.56 - $0.58
Year-over-
year change N/M N/M
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GAAP
Revenues $2.46B $2.40B - $2.60B $2.55B - $2.65B
Year-over- decrease 2% -increase 6% increase 4% - 8%
year change
Diluted EPS ($0.18) $0.35 - $0.39 $0.42 - $0.44
Year-over-
year change N/M N/M
Diluted EPS
attributable
to QSI ($0.03) ($0.05) ($0.05)
Diluted EPS
attributable
to share-
based
compensation ($0.09) ($0.07) ($0.07)
Diluted EPS
attributable
to certain
tax items (3) ($0.02) ($0.02) ($0.02)
Diluted EPS
attributable
to in-
process R&D $0.00 N/A N/A
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Metrics
MSM shipments approx. 69M approx. 88M - 92M approx. 92M - 93M
CDMA/WCDMA
devices
shipped (1) approx. 128M* approx. 144M - 149M* not updated
CDMA/WCDMA
device
wholesale
average
selling price
(1) approx. $201* approx. $179* not updated
*Shipments in
December
quarter,
reported in
March quarter
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(1) CDMA/WCDMA device shipments and average selling prices are based on
estimated worldwide device shipments and licensee selling prices,
including shipments and selling prices not reported to Qualcomm.
(2) The second quarter of fiscal 2009 results included a $748 million
charge related to a litigation settlement and patent agreement with
Broadcom Corporation.
(3) The estimate of our fiscal 2010 GAAP effective tax rate includes tax
expense of approximately $130 million for the year 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.
Sums may not equal totals due to rounding.
N/A - Not Applicable
N/M - Not Meaningful
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. While we do
not forecast impairments, we have temporary unrealized losses on marketable
securities that could be recognized as other-than-temporary losses in future
periods if financial conditions affecting those securities do not improve.
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.
Qualcomm Incorporated (Nasdaq: QCOM) 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,
Calif., Qualcomm is included in the S&P 100 Index, the S&P 500 Index and is a
2009 FORTUNE 500(R) company. For more information, please visit
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. Moreover, it is generally
not an expense that requires or will require cash payment by the Company.
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 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 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 current 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; the development, deployment and commercial acceptance of the
FLO TV(TM) network and FLO(TM) technology; the development and commercial
acceptance of the mirasol(R) display technology; foreign currency
fluctuations; strategic investments and transactions we have or may pursue;
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 publicly
update 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
FLO 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
Reconciliation of Non-GAAP Financial Measure Related to
Prior Period
(In millions, except per share data)
Second Quarter - Fiscal Year 2009
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Share-Based In-Process
Segments Pro Forma Compensation(1) Tax Items R&D QSI (2) GAAP
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Revenues $2,447 $- $- $- $8 $2,455
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EBT 147 (140) - (6) (102) (101)
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Net (loss)
income (46) (145) (36) (6) (56) (289)
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Diluted EPS $(0.03) $(0.09) $(0.02) $- $(0.03) $(0.18)
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Diluted shares
used 1,651 1,651 1,651 1,651 1,651 1,651
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(1) 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.
(2) 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.
Sums may not equal totals due to rounding.
SOURCE Qualcomm Incorporated
CONTACT: Warren Kneeshaw of Qualcomm Incorporated,
+1-858-658-4813,
ir@qualcomm.com
NEWS 
