Qualcomm Incorporated

QUALCOMM Announces Record Second Quarter Fiscal 2007 Results

    San Diego (ots/PRNewswire) -

    - Revenues US$2.22 Billion, Diluted EPS US$0.43

    - Pro Forma Revenues US$2.22 Billion, Diluted EPS US$0.50

    - Financial Guidance Increased for Fiscal 2007

    QUALCOMM Incorporated (Nasdaq: QCOM) today announced record results for the second quarter of fiscal 2007 ended April 1, 2007.

    Total QUALCOMM (GAAP) Second Quarter Results

    Total QUALCOMM results are reported in accordance with generally accepted accounting principles (GAAP).

@@start.t1@@      - Revenues: US$2.22 billion, up 21 percent year-over-year and 10 percent
         sequentially.
      - Net income: US$726 million, up 22 percent year-over-year and 12 percent
         sequentially.
      - Diluted earnings per share: US$0.43, up 26 percent year-over-year and
         13 percent sequentially.
      - Effective tax rate: 22 percent for the quarter. Fiscal 2007 estimated
         tax rate of approximately 21 percent.
      - Estimated share-based compensation: US$84 million, net of tax, up
         8 percent year-over-year and down 3 percent sequentially.
      - Operating cash flow: US$991 million, up 11 percent year-over-year;
         45 percent of revenues.
      - Return of capital to stockholders: US$438 million, including
         US$398 million, or US$0.24 per share, of cash dividends paid (relating
         to dividends declared in the first and second quarters) and US$40
         million to repurchase 1.0 million shares of our common stock.@@end@@

    QUALCOMM Pro Forma Second Quarter Results

    Pro forma results exclude the QUALCOMM Strategic Initiatives (QSI) segment, certain estimated share-based compensation, certain tax adjustments related to prior years and acquired in-process research and development (R&D) expense.

@@start.t2@@      - Revenues: US$2.22 billion, up 21 percent year-over-year and 10 percent
         sequentially.
      - Net income: US$838 million, up 19 percent year-over-year and 16 percent
         sequentially.
      - Diluted earnings per share: US$0.50, up 22 percent year-over-year and
         16 percent sequentially; excludes US$0.01 loss per share attributable
         to the QSI segment, US$0.05 loss per share attributable to estimated
         share-based compensation and US$0.01 loss per share attributable to
         acquired in-process R&D.
      - Effective tax rate: 24 percent for the quarter and estimated for
         fiscal 2007.
      - Free cash flow: US$1.09 billion, up 15 percent year-over-year;
         49 percent of revenues. (Defined as net cash from operating
         activities less capital expenditures).@@end@@

    Detailed reconciliations between total QUALCOMM (GAAP) results and QUALCOMM pro forma results, and cash flow are included at the end of this news release. Prior period reconciliations are presented on our Investor Relations web page at www.qualcomm.com.

    "We are pleased to report that the 3G CDMA-based market continues to grow at a rapid pace. Our results reflect strong year-over-year growth in CDMA2000(R) and WCDMA chipsets and handsets driving record revenue and earnings per share," said Dr. Paul E. Jacobs, chief executive officer of QUALCOMM. "Based on our current outlook, thanks primarily to stronger than expected chipset demand across our product portfolio and higher CDMA2000 handset shipments, we are raising our fiscal 2007 revenue and earnings per share guidance."

    "Focused execution by QUALCOMM and its partners resulted in many exciting achievements this quarter. The MediaFLO(TM) USA service was commercially launched by Verizon Wireless and AT&T/Cingular announced their plan to launch services later this year. The GSM Association selected LG's phone, powered by a QUALCOMM chipset, as the '3G for All' winner to enable feature rich WCDMA handsets at lower prices. In addition, we announced the expansion of our single chip product line to include EV-DO Rev. A, providing a low cost mobile broadband solution. The innovation and competition enabled by our business model continues to provide manufacturers, operators and subscribers compelling devices, applications and services globally."

    Cash and Marketable Securities

    QUALCOMM's cash, cash equivalents and marketable securities totaled approximately US$11.3 billion at the end of the second quarter of fiscal 2007, compared to US$10.5 billion at the end of the first quarter of fiscal 2007 and US$10.2 billion a year ago. During the second quarter of fiscal 2007, we announced a 17 percent increase in our quarterly dividend from US$0.12 to US$0.14 per share. A cash dividend of US$0.14 per share is payable on June 29, 2007 to stockholders of record at the close of business on June 1, 2007.

    Estimated Share-Based Compensation

    Total QUALCOMM (GAAP) net income for the second quarter of fiscal 2007 included estimated share-based compensation, net of tax, of US$84 million, or US$0.05 per share, compared to US$78 million, or US$0.05 per share in the prior year quarter.

@@start.t3@@      (All figures in US Dollars unless otherwise noted)
      Research and Development
                                                         Estimated                                        Total
                                      QUALCOMM    Share-Based    In-Process                QUALCOMM
      ($ in millions)        Pro Forma  Compensation         R&D          QSI      (GAAP)
      Second quarter
        fiscal 2007                 $370              $58                $10          $16        $454
      As a % of revenue            17%                                                                 20%
      Second quarter
        fiscal 2006                 $302              $52                $21          $15        $390
      As a % of revenue            16%                                                                 21%
      Year-over-year
        change ($)                      23%              12%              (52%)          7%         16%@@end@@

    Pro forma R&D expenses increased 23 percent year-over-year, primarily due to additional engineering resources for the development of integrated circuit products and other initiatives to support low-cost phones, multimedia applications, high-speed wireless Internet access and multi-mode, multi-band, multi-network products and technologies. QSI R&D expenses are primarily related to MediaFLO USA.

@@start.t4@@      Selling, General and Administrative
                                                         Estimated                          Total
                                      QUALCOMM    Share-Based                        QUALCOMM
      ($ in millions)        Pro Forma  Compensation         QSI         (GAAP)
      Second quarter
        fiscal 2007                 $301              $59                $25          $385
      As a % of revenue            14%                                                    17%
      Second quarter
        fiscal 2006                 $188              $58                $17          $263
      As a % of revenue            10%                                                    14%
      Year-over-year
        change ($)                      60%                2%                47%            46%@@end@@

    Pro forma selling, general and administrative (SG&A) expenses increased 60 percent year-over-year, largely attributable to increases in legal fees, employee related expenses and bad debt expense. The year-over-year increase in QSI SG&A expenses is primarily related to MediaFLO USA.

    Effective Income Tax Rate

    Our fiscal 2007 effective income tax rate is estimated to be 21 percent for total QUALCOMM (GAAP), consistent with our prior estimate. The second quarter tax rate of 22 percent for total QUALCOMM (GAAP) is higher than the estimated annual effective income tax rate due primarily to US$33 million of tax benefits recorded in the first quarter of fiscal 2007 related to the retroactive extension of the federal research and development tax credit. Our fiscal 2007 QUALCOMM pro forma effective income tax rate is estimated to be 24 percent, compared to our previous estimate of 25 percent. This decrease in  our pro forma estimated annual rate is primarily due to an increase in  forecasted earnings taxed at less than the United States federal tax rate.

    QUALCOMM Strategic Initiatives

    The QSI segment includes our strategic investments, including our MediaFLO USA subsidiary, and related income and expenses. Total QUALCOMM (GAAP) results for the second quarter of fiscal 2007 include US$0.01 loss per share for the QSI segment. The second quarter of fiscal 2007 QSI results included US$50 million in operating expenses, primarily related to MediaFLO  USA.

    Business Outlook

    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. Due to their nature, certain income and expense items, such as realized investment gains or losses in QSI, gains and losses on certain derivative instruments or asset impairments, cannot be accurately forecast. Accordingly, the Company excludes forecasts of such items from its business outlook, and actual results may vary materially from the business outlook if the Company incurs any such income or expense items. Estimated share-based compensation in future periods may vary materially from the business outlook as the methodology used to calculate this estimate is dependent on a variety of assumptions which are subject to market fluctuations and other factors.

    The following table summarizes total QUALCOMM (GAAP) and QUALCOMM pro forma guidance for the third fiscal quarter and fiscal year 2007 based on the current business outlook. The pro forma business outlook provided below is presented consistent with the presentation of pro forma results provided elsewhere herein.

    Our third quarter and fiscal 2007 guidance includes the anticipated positive impact to QTL revenue resulting from an arbitration decision in April 2007 in our favor against Ericsson and Sony Ericsson for underpaying royalties to us under the terms of the license agreement with us. Under the arbitration order, we will receive US$30 million for subscriber unit sales from 2004 through the first quarter of calendar 2006. In addition, royalty payments from the first quarter of calendar 2006 to the present, and going forward, will be made in accordance with the arbitrators' decision providing a positive impact on revenues and earnings.

    We are engaged in multiple disputes with Nokia Corp. including litigation over Nokia's obligation to pay royalties for the use of certain of our patents. As a result, under generally accepted accounting principles, we do not expect to be able to record royalty revenue attributable to Nokia's sales starting in the fourth quarter of fiscal 2007 until an arbitrator (or court) awards damages or the disputes are otherwise resolved by agreement with Nokia. We had previously estimated the potential impact of non-payment of royalties from Nokia in the fourth quarter of fiscal 2007 for June quarter shipments to be approximately US$0.04 to US$0.06 diluted earnings per share. Our current estimate of royalties which we believe will be owed from Nokia in the fourth quarter of fiscal 2007 for June quarter shipments is approximately US$0.04 to US$0.05 diluted earnings per share, which we have excluded from our current fiscal 2007 guidance.

    The following estimates are approximations and are based on the current business outlook:

@@start.t5@@                                            Business Outlook Summary
      THIRD FISCAL QUARTER
                                                                                          Current Guidance
                                                                         Q3'06                 Q3'07
                                                                        Results            Estimates
      QUALCOMM Pro Forma
      Revenues                                                      $1.95B              $2.2B - $2.3B
      Year-over-year change                                                  increase 13% - 18%
      Diluted earnings per share (EPS)                 $0.42              $0.50 - $0.52
      Year-over-year change                                                  increase 19% - 24%
      Total QUALCOMM (GAAP)
      Revenues                                                      $1.95B              $2.2B - $2.3B
      Year-over-year change                                                  increase 13% - 18%
      Diluted earnings per share (EPS)                 $0.37              $0.43 - $0.45
      Year-over-year change                                                  increase 16% - 22%
      Diluted EPS attributable to QSI                  $0.00                         ($0.02)
      Diluted EPS attributable to estimated
        share-based compensation                          ($0.05)                        ($0.05)
      Metrics
      MSM Shipments                                      approx. 55M        approx. 62M - 65M
      CDMA/WCDMA handset units shipped        approx. 66M(x)  approx. 81M - 85M(x)
      CDMA/WCDMA handset unit wholesale
        average selling price                      approx. $213(x)          approx. $213(x)
      (x)Shipments in Mar. quarter,
        reported in June quarter
      FISCAL YEAR
                                                                Prior Guidance      Current Guidance
                                          FY 2006                FY 2007                  FY 2007
                                          Results          Estimates(1)            Estimates(2)
      QUALCOMM Pro Forma
      Revenues                          $7.53B         $8.1B - $8.6B              $8.4B - $8.7B
      Year-over-year change                  increase 8% - 14%      increase 12% - 16%
      Diluted earnings
        per share (EPS)              $1.64         $1.72 - $1.77              $1.84 - $1.88
      Year-over-year change                    increase 5% - 8%      increase 12% - 15%
      Total QUALCOMM (GAAP)
      Revenues                          $7.53B         $8.1B - $8.6B              $8.4B - $8.7B
      Year-over-year change                  increase 8% - 14%      increase 12% - 16%
      Diluted earnings
        per share (EPS)              $1.44         $1.44 - $1.49              $1.57 - $1.61
      Year-over-year change                 even - increase 3%        increase 9% - 12%
      Diluted EPS
        attributable
        to in-process R&D         ($0.01)                        n/a                        ($0.01)
      Diluted EPS
        attributable
        to QSI                          ($0.02)                  ($0.10)                      ($0.09)
      Diluted EPS
        attributable
        to estimated
        share-based
        compensation                 ($0.19)                  ($0.20)                      ($0.20)
      Diluted EPS
        attributable
        to tax items
        related to
        prior years                    $0.02                      $0.02                         $0.02
      Metrics
      Fiscal year(y)
        CDMA/WCDMA
        handset unit
        wholesale
        average
        selling price      approx. $215          approx. $210              approx. $208
      (y)Shipments in Sept.
        to June quarters,
        reported in Dec.
        to Sept. quarters
      CALENDAR YEAR Handset Estimates
                                                                  Prior Guidance        Current Guidance
      CDMA/WCDMA handset                                 Calendar 2007         Calendar 2007
        unit shipments        Calendar 2006            Estimates                Estimates
      March quarter            approx. 66M          not provided      approx. 81M - 85M
      June quarter              approx. 70M          not provided              not provided
      September quarter      approx. 76M          not provided              not provided
      December quarter        approx. 91M          not provided              not provided
      Calendar year range
        (approx.)                            301M            368M - 388M                373M - 393M
                                          Midpoint                Midpoint                  Midpoint
      CDMA/WCDMA units      approx. 301M          approx. 378M              approx. 383M
      CDMA units                approx. 200M          approx. 203M              approx. 208M
      WCDMA units              approx. 101M          approx. 175M              approx. 175M
      (1) Prior FY 2007 estimates did not reflect the potential adverse impact
            on our results of Nokia not paying royalties in the fourth quarter
            of fiscal 2007 for June quarter shipments.  Our prior estimate of
            such impact was approximately US$0.04 to US$0.06 diluted earnings
            per share.
      (2) Current FY 2007 estimates do not reflect the potential opportunity of
            Nokia paying royalties in the fourth quarter of fiscal 2007 for
            June quarter shipments.  Our current estimate of such opportunity is
            approximately US$0.04 to US$0.05 diluted earnings per share.
      Sums may not equal totals due to rounding.@@end@@

    Results of Business Segments

    The following tables, which present segment information, have been adjusted to reflect the 2007 segment presentation (Note 1) (in millions, except per share data):

@@start.t6@@      Second Quarter - Fiscal Year 2007
                                                                                                         Reconciling
      Segments                                QCT                QTL                QWI          Items(2)
      Revenues                            $1,259              $759              $198                 $5
      Change from prior year          24%                19%                11%                N/M
      Change from prior quarter        2%                27%                 5%                N/M
      EBT                                        $368              $636              $ 20                $82
      Change from prior year          26%                 8%                25%                N/M
      Change from prior quarter      16%                28%                 0%                N/M
                                                        Estimated                                          Total
                                 QUALCOMM        Share-Based      In-Process                QUALCOMM
      Segments              Pro Forma  Compensation(3)        R&D         QSI(4)    (GAAP)
      Revenues                $2,221              $--                  $--          $--        $2,221
      Change from
        prior year                 21%                                                                        21%
      Change from
        prior quarter            10%                                                                        10%
      EBT                        $1,106          $(126)                $(10)        $(42)         $928
      Change from
        prior year                 15%                5%                 (52%)         17%            18%
      Change from
        prior quarter            16%              (3%)                N/M            (2%)          19%
      Net income (loss)    $838            $(83)                 $(9)        $(20)         $726
      Change from
        prior year                 19%                6%                 (57%)         43%            22%
      Change from
        prior quarter            16%              (3%)                N/M            (5%)          12%
      Diluted EPS            $0.50         $(0.05)            $(0.01)    $(0.01)        $0.43
      Change from
        prior year                 22%                0%                    0%            0%            26%
      Change from
        prior quarter            16%                0%                 N/M              0%            13%
      Diluted shares
        used                      1,693          1,693                1,693        1,693         1,693
      First Quarter - Fiscal Year 2007
                                                                                                         Reconciling
      Segments                                QCT                QTL                QWI         Items(2)
      Revenues                            $1,230              $600              $188                 $1
      EBT                                         316                498                 20                118
                                                        Estimated                                          Total
                                 QUALCOMM        Share-Based          Tax                      QUALCOMM
      Segments              Pro Forma  Compensation(3)  Items(5)      QSI(4)    (GAAP)
      Revenues                $2,019              $--                  $--          $--        $2,019
      EBT                            952            (130)                  --          (43)          779
      Net income (loss)      722              (86)                  33          (21)          648
      Diluted EPS            $0.43         $(0.05)              $0.02      $(0.01)        $0.38
      Diluted shares
        used                      1,685          1,685                1,685        1,685         1,685
      Second Quarter - Fiscal Year 2006
                                                                                                      Reconciling
      Segments                        QCT(1)(z)    QTL(1)(z)    QWI(1)(z)  Items(1)(2)(z)
      Revenues                          $1,018            $640            $178              $(2)
      EBT                                        291              587                16                68
                                                        Estimated                                          Total
                                 QUALCOMM        Share-Based      In-Process                QUALCOMM
      Segments              Pro Forma  Compensation(3)         R&D        QSI(4)    (GAAP)
      Revenues                $1,834              $--                  $--          $--        $1,834
      EBT                            962            (120)                 (21)         (36)          785
      Net income (loss)      706              (78)                 (21)         (14)          593
      Diluted EPS            $0.41         $(0.05)            $(0.01)    $(0.01)        $0.34
      Diluted shares
        used                      1,721          1,721                1,721        1,721         1,721
      Third Quarter - Fiscal Year 2006
                                                                                                      Reconciling
      Segments                        QCT(1)(z)    QTL(1)(z)    QWI(1)(z)  Items(1)(2)(z)
      Revenues                          $1,133            $640            $178              $--
      EBT                                        346              576                18                36
                                                                  Estimated                          Total
                                              QUALCOMM      Share-Based                        QUALCOMM
      Segments                         Pro Forma    Compensation(3)    QSI(4)      (GAAP)
      Revenues                              $1,951              $--              $--         $1,951
      EBT                                          976            (126)            (26)            824
      Net income (loss)                    726              (83)              --              643
      Diluted EPS                          $0.42         $(0.05)            $--          $0.37
      Diluted shares used              1,728          1,728          1,728          1,728
      Twelve Months - Fiscal Year 2006
                                                                                                      Reconciling
      Segments                        QCT(1)(z)    QTL(1)(z)    QWI(1)(z)  Items(1)(2)(z)
      Revenues                          $4,332         $2,467            $731              $(4)
      EBT                                    1,298          2,233                78              197
                                            Estimated                                                    Total
                        QUALCOMM      Share-Based         Tax    In-Process              QUALCOMM
      Segments    Pro Forma  Compensation(3)  Items        R&D         QSI(4)  (GAAP)
      Revenues        $7,526            $--                $--         $--          $--      $7,526
      EBT                 3,806          (495)                --         (22)        (133)      3,156
      Net income
        (loss)          2,804          (320)                40         (22)         (32)      2,470
      Diluted EPS    $1.64        $(0.19)          $0.02    $(0.01)    $(0.02)      $1.44
      Diluted
        shares
        used              1,711         1,711            1,711      1,711        1,711        1,711
      Six Months - Fiscal Year 2007
                                                                                                         Reconciling
      Segments                                QCT                QTL                QWI         Items(2)
      Revenues                            $2,490          $1,359              $387                 $4
      Change from prior year            21%                17%                 8%              N/M
      EBT                                        $684          $1,134                $40              $200
      Change from prior year              9%                 6%                21%              N/M
                                            Estimated                                                    Total
                        QUALCOMM      Share-Based         Tax      In-Process            QUALCOMM
      Segments    Pro Forma  Compensation(3) Items(5)      R&D        QSI(4)  (GAAP)
      Revenues        $4,240            $--                $--          $--         $--      $4,240
      Change from
        prior year         19%                                                                                19%
      EBT                $2,058         $(257)              $--         $(10)      $(85)    $1,706
      Change from
        prior year         10%              6%                              (52%)         1%          12%
      Net income
        (loss)         $1,560         $(169)              $33          $(9)      $(42)    $1,373
      Change from
        prior year         14%              6%              (41%)        (57%)        20%          13%
      Diluted EPS    $0.92        $(0.10)          $0.02      $(0.01)  $(0.02)      $0.81
      Change from
        prior year         15%            11%              (33%)          0%          0%          14%
      Diluted
        shares
        used              1,689         1,689            1,689        1,689      1,689        1,689
      Six Months - Fiscal Year 2006
                                                                                                      Reconciling
      Segments                        QCT(1)(z)    QTL(1)(z)    QWI(1)(z)  Items(1)(2)(z)
      Revenues                          $2,051         $1,165            $357                $2
      EBT                                        629          1,066                33              140
                                            Estimated                                                    Total
                        QUALCOMM      Share-Based         Tax    In-Process              QUALCOMM
      Segments    Pro Forma  Compensation(3)  Items        R&D         QSI(4)  (GAAP)
      Revenues        $3,575            $--                 $--        $--          $--      $3,575
      EBT                 1,868          (242)                 --        (21)         (84)      1,521
      Net income      1,373          (160)                 56        (21)         (35)      1,213
      Diluted EPS    $0.80        $(0.09)            $0.03  $(0.01)    $(0.02)      $0.71
      Diluted
        shares
        used              1,711         1,711              1,711    1,711        1,711        1,711
      (1) During the first quarter of fiscal 2007, the Company reassessed the
            intersegment royalty charged to QCT by QTL and determined that the
            royalty should be eliminated starting in fiscal 2007 for management
            reporting purposes.  As a result, QCT did not record a royalty to
            QTL in the first six months of fiscal 2007.  The Company also
            reorganized the QUALCOMM Wireless Systems (QWS) division into the
            QWBS division within the QWI segment.  Revenues and operating results
            relating to QWS were included in reconciling items through the end of
            fiscal 2006.  Prior period segment information has been adjusted to
            conform to the new segment presentation.
      (2) Reconciling items related to revenues consist primarily of other
            nonreportable segment revenues less intersegment eliminations.
            Reconciling items related to earnings before taxes consist primarily
            of certain investment income, research and development expenses and
            marketing expenses that are not allocated to the segments for
            management reporting purposes, nonreportable segment results and the
            elimination of intercompany profit.
      (3) 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.
      (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 tax provision for QUALCOMM pro forma, the tax
            adjustment column and the tax provisions related to estimated
            share-based compensation and in-process R&D from the tax provision
            for total QUALCOMM (GAAP).
      (5) During the first quarter of fiscal 2007, the federal R&D tax credit
            that expired on December 31, 2005 was extended by Congress for a
            period of two years beyond the prior expiration date.  The Company
            recorded a tax benefit of US$33 million, or US$0.02 diluted earnings
            per share, related to fiscal 2006 in the first quarter of fiscal
            2007 due to this retroactive extension.  The effective tax rate for
            the first quarter of fiscal 2007 for total QUALCOMM (GAAP) was 17%
            primarily as a result of this benefit.  The first quarter fiscal
            2007 QUALCOMM pro forma results exclude this tax benefit
            attributable to 2006.
      N/M - Not Meaningful
      Sums may not equal totals due to rounding.
      (z) As adjusted to conform to 2007 segment presentation@@end@@

    Conference Call

    QUALCOMM's second quarter fiscal 2007 earnings conference call will be broadcast live on April 25, 2007 beginning at 1:45 p.m. Pacific Daylight Time (PDT) on the Company's web site at: www.qualcomm.com. This conference call may contain forward-looking financial information. The conference call 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 April 25, 2007 beginning at approximately 5:30 p.m. (PDT) through June 25, 2007 at 9:00 p.m. (PDT). 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 1486859. An audio replay of the conference call will be available on the Company's web site at www.qualcomm.com for two weeks following the live call.

    Editor's Note: If you would like to view the web slides that accompany this earnings release and conference call, please view the QUALCOMM Investor Relations website at http://investor.qualcomm.com/results.cfm .

    QUALCOMM Incorporated (www.qualcomm.com) 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 500 Index and is a 2006 FORTUNE 500(R) company traded on The Nasdaq Stock Market(R) under the ticker symbol QCOM.

    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, income before income taxes, effective tax rate, net income, diluted earnings 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 eliminating the episodic impact of strategic investments in QSI and items such as acquired in-process R&D, as well as the inherent, non-operational volatility of share-based compensation. 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 QUALCOMM Strategic Initiatives (QSI) segment, certain estimated share-based compensation, certain tax adjustments 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 the executive bonus program, is excluded because management views the valuation of options and other share-based compensation as theoretical and unrelated to the Company's operational performance as the share-based compensation is affected by factors that are subject to change on each grant date, including the Company's stock price, stock market volatility, expected option life, risk-free interest rates and expected dividend payouts in future years. Moreover, it is not an expense that requires or will require cash payment by the Company. Certain tax adjustments related to prior years are excluded in order to provide a clearer understanding of the Company's ongoing 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 total QUALCOMM (GAAP) results and QUALCOMM pro forma results and total QUALCOMM (GAAP) cash flow and QUALCOMM pro forma cash flow 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 development, deployment and commercial acceptance of CDMA-based networks and CDMA-based technology, including CDMA2000 1X, 1xEV-DO, WCDMA and HSDPA both domestically and internationally;  our dependence on major customers and licensees; attacks on our licensing 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; fluctuations in the demand for CDMA-based products, services or applications; 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 MediaFLO USA network and FLO(TM) technology; as well as the other risks detailed from time-to-time in the Company's SEC reports.

    (C) 2007 QUALCOMM Incorporated. All rights reserved. QUALCOMM is a registered trademark of QUALCOMM Incorporated. CDMA2000(R) is a registered trademark of the Telecommunications Industry Association. All other trademarks are the property of their respective owners.

@@start.t7@@      QUALCOMM Contact:
      John Gilbert
      Vice President of Investor and Industry Analyst Relations
      +1-858-658-4813 (ph) +1-858-651-9303 (fax)
      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 TOTAL QUALCOMM (GAAP) RESULTS
                                  (In millions, except per share data)
                                                        (Unaudited)
                                                      Three Months Ended April 1, 2007
                                                        Estimated                                        Total
                                 QUALCOMM        Share-Based      In-Process            QUALCOMM
                                 Pro Forma  Compensation(a)        R&D        QSI        (GAAP)
      Revenues:
         Equipment and
          services          $1,370                $--                $--         $--      $1,370
         Licensing and
          royalty fees         851                 --                 --          --          851
              Total
                revenues        2,221                 --                 --          --        2,221
      Operating
        expenses:
         Cost of
          equipment
          and services
          revenues                616                  9                 --            9          634
         Research and
          development          370                 58                 10          16          454
         Selling,
          general and
          administrative      301                 59                 --          25          385
            Total
              operating
              expenses         1,287                126                 10          50        1,473
      Operating income
        (loss)                      934              (126)              (10)        (50)         748
      Investment income,
        net                          172(b)            --                 --            8(c)      180
      Income (loss)
        before income
        taxes                    1,106              (126)              (10)        (42)         928
      Income tax
        (expense)
        benefit                  (268)(d)          43                  1          22(e)    (202)(d)
      Net income (loss)    $838              $(83)              $(9)      $(20)        $726
      Earnings (loss)
        per common share:
         Diluted                $0.50          $(0.05)         $(0.01)  $(0.01)      $0.43
      Shares used in
        per share
        calculations:
         Diluted                1,693            1,693            1,693      1,693        1,693
      Supplemental
        Financial Data:
      Operating
        Cash Flow            $1,159              $(87)(g)        $(10)      $(71)        $991
      Operating
        Cash Flow as a
        % of Revenues            52%                                                                  45%
      Free Cash
        Flow (f)              $1,087              $(87)(g)        $(10)      $(91)        $899
      Free Cash Flow
        as a % of
        Revenues                    49%                                                                  40%
      (a) Estimated share-based compensation presented above and excluded from
            pro forma results does not include US$1 million, net of tax, related
            to share-based awards granted under the executive bonus program.
      (b) Includes US$125 million in interest and dividend income related to
            cash, cash equivalents and marketable securities, which are not part
            of the Company's strategic investment portfolio, and US$49 million in
            net realized gains on investments, partially offset by US$1 million
            in other-than-temporary losses on investments and US$1 million in
            interest expense.
      (c) Includes US$6 million in net realized gains on investments and
            US$3 million in interest and dividend income, partially offset by
            US$1 million in interest expense.
      (d) The second quarter of fiscal 2007 tax rates are approximately 22% for
            total QUALCOMM (GAAP) and approximately 24% for QUALCOMM pro forma.
      (e) At fiscal year-end, the sum of the quarterly tax provisions for each
            column, including QSI, will equal 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 tax provision for QUALCOMM pro forma and the tax
            provisions related to estimated share-based compensation and
            in-process R&D from the tax provision for total QUALCOMM (GAAP).
      (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 Total QUALCOMM Net Cash Provided by Operating Activities
            for the three months ended April 1, 2007, included herein.
      (g) Incremental tax benefits from stock options exercised during the
            period.@@end@@

@@start.t8@@                                                QUALCOMM Incorporated
                          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING FROM
                        PRO FORMA RESULTS TO TOTAL QUALCOMM (GAAP) RESULTS
                                  (In millions, except per share data)
                                                        (Unaudited)
                                                      Six Months Ended April 1, 2007
                                              Estimated         Tax          In-                Total
                          QUALCOMM    Share-Based      Adjust-  Process          QUALCOMM
                         Pro Forma  Compensation(a)  ment         R&D      QSI    (GAAP)
      Revenues:
         Equipment
          and
          services    $2,712          $--                $--         $--        $--    $2,712
         Licensing
          and
          royalty
          fees            1,528            --                 --          --         --      1,528
                              4,240            --                 --          --         --      4,240
      Operating
        expenses:
         Cost of
          equipment
          and
          services
          revenues      1,239            20                 --          --          9      1,268
         Research
          and
          development    737          115                 --          10         33         895
         Selling,
          general and
          admini-
          strative         582          122                 --          --         50         754
            Total
              operating
              expenses  2,558          257                 --          10         92      2,917
      Operating
        income (loss) 1,682         (257)                --         (10)      (92)    1,323
      Investment
        income
        (expense),
        net                    376(b)        --                 --          --          7(c)    383
      Income (loss)
        before income
        taxes              2,058         (257)                --         (10)      (85)    1,706
      Income tax
        (expense)
        benefit            (498)          88                 33            1         43(e)  (333)(d)
      Net income
        (loss)          $1,560        $(169)              $33         $(9)    $(42)  $1,373
      Earnings (loss)
        per common
        share:
         Diluted         $0.92      $(0.10)          $0.02    $(0.01) $(0.02)    $0.81
      Shares used
        in per share
        calculations:
         Diluted         1,689        1,689            1,689      1,689    1,689      1,689
      Supplemental
        Financial
        Data:
      Operating
        Cash Flow      $1,994        $(119)(g)          $--        $(10)    $(85)  $1,780
      Operating
        Cash Flow
        as a % of
        Revenue                47%                                                                          42%
      Free Cash
        Flow (f)        $1,633        $(119)(g)          $--        $(10)  $(138)  $1,366
      Free Cash
        Flow
        as a % of
        Revenue                39%                                                                          32%
      (a) Estimated share-based compensation presented above and excluded from
            pro forma results does not include US$1 million, net of tax, related
            to share-based awards granted under the executive bonus program.
      (b) Includes US$266 million in interest and dividend income related to
            cash, cash equivalents and marketable securities, which are not part
            of the Company's strategic investment portfolio, US$112 million in
            net realized gains on investments, partially offset by US$1 million
            in other-than-temporary losses on investments and US$1 million in
            interest expense.
      (c) Includes US$7 million in net realized gains on investments and
            US$4 million in interest and dividend income, partially offset by
            US$2 million in interest expense, US$1 million in
            other-than-temporary losses on investments and US$1 million in losses
            on derivatives.
      (d) The tax rate of 20% for the first six months of fiscal 2007 for total
            QUALCOMM (GAAP) is lower than the estimated annual effective tax rate
            of 22% due primarily to US$33 million of tax benefits recorded in the
            first quarter related to the retroactive extension of the federal
            research and development tax credit.
      (e) At fiscal year-end, the sum of the quarterly tax provisions for each
            column, including QSI, will equal 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 tax provision for QUALCOMM pro forma, the tax
            adjustment column and the tax provisions related to estimated
            share-based compensation and in-process R&D from the tax provision
            for total QUALCOMM (GAAP).
      (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 Total QUALCOMM Net Cash Provided by Operating Activities for
            the six months ended April 1, 2007, included herein.
      (g) Incremental tax benefits from stock options exercised during the
            period.@@end@@

@@start.t9@@                                                QUALCOMM Incorporated
                          RECONCILIATION OF PRO FORMA FREE CASH FLOWS TO
              TOTAL QUALCOMM (GAAP) NET CASH PROVIDED BY OPERATING ACTIVITIES
                                    AND OTHER SUPPLEMENTAL DISCLOSURES
                                                      (In millions)
                                                        (Unaudited)
                                                    Three Months Ended April 1, 2007
                                                        Estimated                                        Total
                                 QUALCOMM        Share-Based      In-Process            QUALCOMM
                                 Pro Forma    Compensation            R&D        QSI      (GAAP)
      Net cash
        provided
        (used) by
        operating
        activities            $1,159            $(87)(a)          $(10)    $(71)      $991
      Less: capital
        expenditures              (72)              --                    --        (20)        (92)
      Free cash flow        $1,087            $(87)                $(10)    $(91)      $899
      Other
        supplemental
        cash
        disclosures:
         Cash transfers
          from QSI (1)            $7              $--                  $--        $(7)        $--
         Cash transfers
          to QSI (2)              (99)              --                    --         99          --
         Net cash
          transfers              $(92)            $--                  $--        $92         $--
                                                      Six Months Ended April 1, 2007
                                                        Estimated                                        Total
                                 QUALCOMM        Share-Based      In-Process            QUALCOMM
                                 Pro Forma    Compensation            R&D        QSI      (GAAP)
      Net cash
        provided
        (used) by
        operating
        activities            $1,994          $(119)(a)          $(10)    $(85)  $1,780
      Less: capital
        expenditures            (361)              --                    --        (53)      (414)
      Free cash flow        $1,633          $(119)                $(10)  $(138)  $1,366
      Other
        supplemental
        cash
        disclosures:
         Cash transfers
          from QSI (1)          $13              $--                  $--      $(13)        $--
         Cash transfers
          to QSI (2)            (194)              --                    --        194          --
         Net cash
          transfers            $(181)            $--                  $--      $181         $--
      (1) Cash from loan payments and sale of equity securities.
      (2) Funding for strategic debt and equity investments and other QSI
            operating expenses.
                                                 Three Months Ended March 26, 2006
                                                        Estimated                                        Total
                                 QUALCOMM        Share-Based      In-Process            QUALCOMM
                                 Pro Forma    Compensation            R&D        QSI      (GAAP)
      Net cash
        provided
        (used) by
        operating
        activities            $1,072          $(172)(a)            $--      $(11)      $889
      Less: capital
        expenditures            (125)              --                    --        (36)      (161)
      Free cash flow          $947          $(172)                 $--      $(47)      $728
                                                    Six Months Ended March 26, 2006
                                                        Estimated                                        Total
                                 QUALCOMM        Share-Based      In-Process            QUALCOMM
                                 Pro Forma    Compensation            R&D        QSI      (GAAP)
      Net cash
        provided
        (used) by
        operating
        activities            $1,785          $(273)(a)            $--      $(27)  $1,485
      Less: capital
        expenditures            (307)              --                    --        (67)      (374)
      Free cash flow        $1,478          $(273)                 $--      $(94)  $1,111
      (a) Incremental tax benefits from stock options exercised during the
            period.@@end@@

@@start.t10@@                                                QUALCOMM Incorporated
                                  CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (In millions, except per share data)
                                                        (Unaudited)
                                                         ASSETS
                                                                                  April 1,      September 24,
                                                                                      2007                2006
      Current assets:
         Cash and cash equivalents                                    $3,353              $1,607
         Marketable securities                                            3,198                4,114
         Accounts receivable, net                                          714                  700
         Inventories                                                                347                  250
         Deferred tax assets                                                  232                  235
         Other current assets                                                 234                  143
            Total current assets                                          8,078                7,049
      Marketable securities                                                4,751                4,228
      Property, plant and equipment, net                          1,582                1,482
      Goodwill                                                                    1,320                1,230
      Deferred tax assets                                                      486                  512
      Other assets                                                              1,037                  707
            Total assets                                                    $17,254            $15,208
                                  LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities:
         Trade accounts payable                                            $566                 $420
         Payroll and other benefits related liabilities        240                  273
         Unearned revenue                                                        289                  197
         Income taxes payable                                                 298                  137
         Other current liabilities                                         433                  395
            Total current liabilities                                  1,826                1,422
      Unearned revenue                                                          151                  141
      Other liabilities                                                         247                  239
            Total liabilities                                                2,224                1,802
      Stockholders' equity:
         Preferred stock, $0.0001 par value;
          issuable in series; 8 shares authorized;
          none outstanding at April 1, 2007 and
          September 24, 2006                                                    --                    --
         Common stock, $0.0001 par value;
          6,000 shares authorized; 1,665 and 1,652
          shares issued and outstanding at
          April 1, 2007 and September 24, 2006,
          respectively                                                              --                    --
         Paid-in capital                                                      7,758                7,242
         Retained earnings                                                  7,075                6,100
         Accumulated other comprehensive income                    197                    64
            Total stockholders' equity                                15,030              13,406
            Total liabilities and stockholders' equity    $17,254            $15,208
                                                QUALCOMM Incorporated
                          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (In millions, except per share data)
                                                        (Unaudited)
                                                          Three Months Ended        Six Months Ended
                                                          April 1, March 26,      April 1, March 26,
                                                              2007        2006              2007        2006
      Revenues:
         Equipment and services                $1,370    $1,122          $2,712    $2,271
         Licensing and royalty fees              851         712            1,528      1,304
            Total revenues                          2,221      1,834            4,240      3,575
      Operating expenses:
         Cost of equipment and
          services revenues                          634         521            1,268      1,037
         Research and development                 454         390                895         731
         Selling, general and
          administrative                                385         263                754         502
            Total operating expenses          1,473      1,174            2,917      2,270
      Operating income                                 748         660            1,323      1,305
      Investment income, net                        180         125                383         216
      Income before income taxes                 928         785            1,706      1,521
      Income tax expense                            (202)      (192)            (333)      (308)
      Net income                                         $726        $593          $1,373    $1,213
      Basic earnings per common
        share                                              $0.44      $0.36            $0.83      $0.73
      Diluted earnings per common
        share                                              $0.43      $0.34            $0.81      $0.71
      Shares used in per share
        calculations:
         Basic                                            1,659      1,664            1,656      1,655
         Diluted                                         1,693      1,721            1,689      1,711
      Dividends per share paid                 $0.24      $0.18            $0.24      $0.18
      Dividends per share announced         $0.12      $0.09            $0.24      $0.18
                                                QUALCOMM Incorporated
                          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      (In millions)
                                                        (Unaudited)
                                                          Three Months Ended        Six Months Ended
                                                          April 1, March 26,      April 1, March 26,
                                                              2007        2006              2007        2006
      Operating Activities:
      Net income                                         $726        $593          $1,373    $1,213
      Adjustments to reconcile net
        income to net cash provided by
        operating activities:
         Depreciation and amortization          93          63                184         121
         Non-cash portion of share-based
          compensation expense                      127         120                257         242
         Incremental tax benefits from
          stock options exercised                 (87)      (172)            (119)      (273)
         Net realized gains on
          marketable securities and
          other investments                          (55)        (40)            (119)        (60)
         Non-cash income tax expense            131         116                229         220
         Other items, net                                 2          22                  8          26
      Changes in assets and liabilities,
        net of effects of acquisitions:
         Accounts receivable, net                  (8)        157                (17)        (14)
         Inventories                                      (17)        (21)              (98)        (39)
         Other assets                                    (57)          5              (155)         21
         Trade accounts payable                      87          19                134         106
         Payroll, benefits and other
          liabilities                                        7          21                  1         (65)
         Unearned revenue                                42            6                102         (13)
         Net cash provided by operating
          activities                                      991         889            1,780      1,485
      Investing Activities:
         Capital expenditures                        (92)      (161)            (414)      (374)
         Purchases of available-for-sale
          securities                                 (1,908)  (2,744)         (3,581)  (6,062)
         Proceeds from sale of
          available-for-sale
          securities                                  1,909      2,283            4,345      4,443
         Other investments and
          acquisitions, net of cash
          acquired                                          (7)      (264)            (227)      (270)
         Other items, net                                 3          41                  1          45
         Net cash (used) provided by
          investing activities                      (95)      (845)              124    (2,218)
      Financing Activities:
         Proceeds from issuance of common
          stock                                              158         287                255         468
         Incremental tax benefits from
          stock options exercised                  87         172                119         273
         Dividends paid                                (398)      (298)            (398)      (298)
         Repurchase and retirement of
          common stock                                  (40)         --              (136)         --
         Net cash (used) provided by
          financing activities                    (193)        161              (160)        443
         Effect of exchange rate changes
          on cash                                              1          (3)                 2          (1)
      Net increase (decrease) in cash and
        cash equivalents                                704         202            1,746        (291)
      Cash and cash equivalents at
        beginning of period                        2,649      1,577            1,607      2,070
      Cash and cash equivalents at
        end of period                                $3,353    $1,779          $3,353    $1,779@@end@@

    Web site:  http://www.qualcomm.com

ots Originaltext: Qualcomm Incorporated
Im Internet recherchierbar: http://www.presseportal.ch

Contact:
John Gilbert, Vice President of Investor and Industry Analyst
Relations of QUALCOMM Incorporated, +1-858-658-4813, or fax,
+1-858-651-9303, ir@qualcomm.com



Weitere Meldungen: Qualcomm Incorporated

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