MEDIA RELEASE PR35016
Qualcomm Raises Financial Guidance for the Third Fiscal Quarter of 2009
SAN DIEGO, June 11 /PRNewswire-AsiaNet/ --
Updated Guidance Reflects Increased Demand for High-End Chipsets
Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator
of advanced wireless technologies, products and services, today updated its
financial guidance for the third fiscal quarter ending June 28, 2009.
The following statements are forward looking and actual results may
differ materially. Please see "Note Regarding Forward-Looking Statements" at
the end of this news release for a description of certain risk factors and
Qualcomm's annual and quarterly reports on file with the Securities and
Exchange Commission (SEC) for a more complete description of risks that may
affect the forward-looking statements.
Pro Forma Defined
Pro forma results and guidance exclude the Qualcomm Strategic Initiatives
(QSI) segment, certain estimated share-based compensation, certain tax items
related to prior years and acquired in-process research and development (R&D)
expense.
Third Fiscal Quarter Business Outlook
The following estimates are based on the current business outlook:
- Revenues: estimated to be $2.67 to $2.77 billion compared to our prior
guidance range of $2.40 to $2.60 billion.
- Operating income: estimated to be $1.06 to $1.11 billion pro forma,
compared to our prior guidance range of $800 to $900 million; and
estimated to be $830 to $880 million in accordance with generally
accepted accounting principles (GAAP), compared to our prior guidance
range of $550 to $650 million.
- CDMA-based Mobile Station Modem(TM) (MSM(TM)) shipments: estimated to
be 94 to 95 million units compared to our prior guidance range of 87 to
92 million units.
- March quarter CDMA-based device shipments: estimated to be 109 to 111
million CDMA units (CDMA2000(R) and WCDMA), compared to our prior
guidance of range of 107 to 112 million units; the CDMA unit average
selling price is now estimated to be approximately $191, compared to our
prior estimate of approximately $196.
"We are very pleased to raise our fiscal third quarter guidance,
reflecting the strong worldwide demand for wireless broadband powered by 3G
CDMA," said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "Our increased
guidance reflects stronger than expected demand for more data-capable
chipsets and increased licensing revenues driven in part by advanced 3G
network upgrades. While some chipset demand for developing markets has
shifted to the fourth fiscal quarter and demand remains generally strong, due
to the current economic environment we remain cautious and currently project
a modest sequential decrease in chipset shipments."
The financial crisis has had, and may continue to have, an impact on the
value of our marketable securities and net investment income (loss). While we
do not forecast impairments, we do have unrealized losses on marketable
securities that could be recognized in the third quarter of fiscal 2009 and
future periods if market conditions do not improve. Given the market
volatility and the significant judgments involved, accurately forecasting
other-than-temporary impairments associated with our marketable securities is
extremely difficult and actual results could vary materially. As a result,
while we are providing revenue, operating income and our other standard
guidance, we are not providing earnings per share guidance.
Moreover, our outlook does not include provisions for the consequences of
injunctions, damages, or fines related to any pending legal matters. 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 for the third
fiscal quarter of 2009 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
THIRD FISCAL QUARTER
Q3'08 Prior Guidance Current Guidance
Results (2) Q3'09 Q3'09
Estimates (3) Estimates (3)
Pro Forma
Revenues $2.76B $2.40B - $2.60B $2.67B - $2.77B
Year-over-year
change decrease 6% - 13% decrease 3% - even
Operating income $1.06B $0.80B - $0.90B $1.06B - $1.11B
Year-over-year
change decrease 15% - 25% even - increase 5%
GAAP
Revenues $2.76B $2.40B - $2.60B $2.67B - $2.77B
Year-over-year
change decrease 6% - 13% decrease 3% - even
Operating income $0.82B $0.55B - $0.65B $0.83B - $0.88B
Year-over-year
change decrease 21% - 33% increase 1% - 7%
Operating income
(loss) attributable
to QSI ($0.08B) ($0.10B) ($0.08B)
Operating income
(loss) attributable
to estimated
share-based
compensation ($0.14B) ($0.15B) ($0.15B)
Operating income
(loss) attributable
to in-process R&D ($0.01B) n/a n/a
Metrics
MSM shipments approx. 86M approx. 87M - 92M approx. 94M - 95M
CDMA/WCDMA
devices
shipped (1) approx. 107M* approx. 107M - 112M* approx. 109M - 111M*
CDMA/WCDMA
device
wholesale
average selling
price (1) approx. $226* approx. $196* approx. $191*
*Shipments in March quarter, reported in June quarter
(1) CDMA/WCDMA device shipments and average selling prices are for
estimated worldwide device shipments, including shipments not
reported to Qualcomm.
(2) Our Q3'08 results do not include royalty revenues attributable to
Nokia's sales.
(3) While we do not forecast impairments, we do have unrealized losses
on marketable securities that could be recognized in future periods
if market conditions do not improve.
Sums may not equal totals due to rounding.
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
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, net investment income (loss),
income 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 estimated share-based compensation, certain tax items related to
prior years 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. Estimated
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 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 related to prior years are excluded in order to provide a
clearer understanding of the Company's ongoing pro forma tax rate and after
tax earnings. The Company decided to include the benefit of the retroactive
extension of the federal research and development tax credit in pro forma
results starting in fiscal 2009 because it recurs with relative frequency and
would have been included in the Company's pro forma results for the prior
year if it had been reenacted in the prior fiscal year. 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 of our technologies in wireless
networks and of 3G wireless communications, equipment and services, including
CDMA2000 1X, 1xEV-DO, WCDMA, HSPA 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;
foreign currency fluctuations; strategic loans, investments and transactions
the Company has or may pursue; 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; as well as the other risks
detailed from time-to-time in the Company's SEC reports.
Qualcomm is a registered trademark of Qualcomm Incorporated. Mobile
Station Modem, MSM, FLO and FLO TV are trademarks of Qualcomm Incorporated.
CDMA2000 is a registered trademark of the Telecommunications Industry
Association (TIA USA). All other trademarks are the property of their
respective owners.
Qualcomm Contact:
John Gilbert
Phone: 1-858-658-4813
e-mail: ir@qualcomm.com
SOURCE Qualcomm Incorporated
(QCOM)
NEWS 
