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Abonner Qualcomm Incorporated

Qualcomm Incorporated

QUALCOMM Announces First Quarter Fiscal 2007 Results

San Diego (ots/PRNewswire)

  • Revenues US$2.02 Billion, Diluted EPS US$0.38
  • Pro Forma Revenues US$2.02 Billion, Diluted EPS US$0.43
  • QUALCOMM Reaffirms Most Recent Fiscal 2007 Revenue and Pro Forma Earnings Guidance
QUALCOMM Incorporated (Nasdaq: QCOM) today announced results for
the first quarter of fiscal 2007 ended December 31, 2006.
Total QUALCOMM (GAAP) First Quarter Results
Total QUALCOMM results are reported in accordance with generally
accepted accounting principles (GAAP).
- Revenues: US$2.02 billion, up 16 percent year-over-year and 1 percent
      sequentially.
    - Net income: US$648 million, up 5 percent year-over-year and 6 percent
      sequentially.
    - Diluted earnings per share: US$0.38, up 6 percent year-over-year and
      6 percent sequentially.
    - Effective tax rate: 17 percent for the quarter. Fiscal 2007 estimated
      tax rate of approximately 21 percent.
    - Estimated share-based compensation: US$87 million, net of tax, up
      6 percent year-over-year and 14 percent sequentially.
    - Operating cash flow: US$789 million, up 32 percent year-over-year;
      39 percent of revenues.
    - Return of capital to stockholders: in the quarter, dividends announced
      totaled US$198 million, or US$0.12 per share, which were paid on
      January 4, 2007, and US$96 million related to the repurchase of our
      common stock.
QUALCOMM Pro Forma First 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.
- Revenues: US$2.02 billion, up 16 percent year-over-year and 1 percent
      sequentially.
    - Net income: US$722 million, up 8 percent year-over-year and 2 percent
      sequentially.
    - Diluted earnings per share: US$0.43, up 10 percent year-over-year and
      2 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$0.02 earnings per share attributable to
      certain tax adjustments related to prior years. (The sum of pro forma
      earnings per share and items excluded do not equal total QUALCOMM
      (GAAP) earnings per share due to rounding).
    - Effective tax rate: 24 percent for the quarter. Fiscal 2007
      estimated tax rate of approximately 25 percent.
    - Free cash flow: US$544 million, up 2 percent year-over-year; 27 percent
      of revenues. (Defined as net cash from operating activities less
      capital expenditures).
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.
"Our results this quarter were driven by record 3G handset and
chipset shipments," said Dr. Paul E. Jacobs, chief executive officer
of QUALCOMM. "The worldwide migration to CDMA-based technologies is
accelerating as we continue to execute with our partners to drive
innovations into the marketplace."
"An increasing number of subscribers and enterprise customers are
benefiting from 3G's higher data rates enabling new applications
including multimedia, 3D gaming, downloadable navigation and access
to the wireless Internet. It is evident that the innovation and
competition our business model enables has benefited wireless
consumers, operators and manufacturers globally."
"Based on our current outlook for CDMA-based handset shipments, we
are pleased to reaffirm our calendar year 2007 forecast which
represents approximately 28% year-over-year growth. We are also
reaffirming our most recent fiscal 2007 revenue and pro forma diluted
earnings per share guidance as adjusted by our recently announced
acquisitions."
Cash and Marketable Securities
QUALCOMM's cash, cash equivalents and marketable securities
totaled approximately US$10.5 billion at the end of the first quarter
of fiscal 2007, compared to US$9.9 billion at the end of fiscal 2006
and US$9.4 billion a year ago. On January 12, 2007, we announced a
cash dividend of US$0.12 per common share payable on March 30, 2007
to stockholders of record at the close of business on March 2, 2007.
Estimated Share-Based Compensation
Total QUALCOMM (GAAP) net income for the first quarter of fiscal
2007 included estimated share-based compensation, net of tax, of
US$87 million, or US$0.05 per share, compared to US$82 million, or
US$0.05 per share in the prior year quarter.
    Research and Development
    (All figures are in US$)
                                             Estimated                Total
                               QUALCOMM     Share-Based              QUALCOMM
    ($ in millions)           Pro Forma     Compensation     QSI      (GAAP)
    First quarter fiscal 2007    $365           $58          $17       $440
    As a % of revenue              18%                                   22%
    First quarter fiscal 2006    $273           $52          $15       $340
    As a % of revenue              16%                                   20%
    Year-over-year change ($)      34%           12%          13%        29%
Pro forma R&D expenses increased 34 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.
    Selling, General and Administrative
                                             Estimated                Total
                               QUALCOMM     Share-Based              QUALCOMM
    ($ in millions)            Pro Forma     Compensation     QSI      (GAAP)
    First quarter fiscal 2007    $282           $62          $25       $369
    As a % of revenue              14%                                   18%
    First quarter fiscal 2006    $168           $58          $13       $239
    As a % of revenue              10%                                   14%
    Year-over-year change ($)      68%            7%          92%        54%
Pro forma selling, general and administrative (SG&A) expenses
increased 68 percent year-over-year, largely attributable to
increases in legal fees and employee related expenses. The
year-over-year increase in QSI SG&A expenses is primarily related to
MediaFLO(TM) USA.
Effective Income Tax Rate
Our fiscal 2007 effective income tax rates are estimated to be 21
percent for total QUALCOMM (GAAP) and 25 percent for QUALCOMM pro
forma, compared to fiscal 2006 effective income tax rates of 22
percent for total QUALCOMM (GAAP) and 26 percent for QUALCOMM pro
forma. During the first quarter of fiscal 2007, the federal research
and development tax credit that expired on December 31, 2005 was
extended by Congress for a period of two years beyond the prior
expiration date. We 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. Our
first quarter fiscal 2007 QUALCOMM pro forma results exclude this tax
benefit attributable to fiscal 2006.
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 first quarter of fiscal 2007 include
US$0.01 loss per share for the QSI segment. The first quarter of
fiscal 2007 QSI results included US$42 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 second 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 license agreement with Nokia Corp. expires in part on April 9,
2007, with Nokia having an option exercisable through the end of 2008
to extend the agreement. The table includes a footnote to size our
estimate of the risk, approximately US$0.04 to US$0.06 diluted
earnings per share, of Nokia not paying royalties in the fourth
quarter of fiscal 2007 for June quarter shipments. Nokia has publicly
stated that they intend to continue to use our patents but not pay
royalties after the expiration of their rights under those patents on
April 9, 2007 should a new license agreement (or extension of the
existing agreement) not be reached by that time. As a result, under
generally accepted accounting principles, we will be unable to record
royalty revenue attributable to Nokia's sales until a court awards
damages or agreement with Nokia is reached. If we cannot conclude an
extension or a new license agreement beyond April 9, 2007, Nokia's
rights to sell certain subscriber products (such as cellular phones
and wireless personal digital assistant devices) under most of our
patents will expire, as will our rights to sell integrated circuits
under Nokia's patents. We intend to pursue and obtain injunctions
against Nokia's sales as well as damages (which will include interest
from the date of infringement) for Nokia's unlicensed sales after
April 9, 2007. While we will continue to work with Nokia to see if we
can reach an agreement, there is no guarantee that we will be able to
successfully resolve this matter before April 9, 2007 on terms which
we find acceptable and little progress has been made to date. If we
are unable to reach agreement, and Nokia continues to use our
unlicensed intellectual property, we will aggressively pursue all our
legal and business options and assume that Nokia will do likewise.
The following estimates are approximations and are based on the
current business outlook:
                            Business Outlook Summary
                             (All figures are in US$)
    SECOND FISCAL QUARTER
                                                            Current Guidance
                                                  Q2'06          Q2'07
                                                Results       Estimates(1)
    QUALCOMM Pro Forma
    Revenues                                     $1.83B        $2.0B - $2.1B
    Year-over-year change                                  increase 9% - 15%
    Diluted earnings per share (EPS)              $0.41        $0.42 - $0.44
    Year-over-year change                                   increase 2% - 7%
    Total QUALCOMM (GAAP)
    Revenues                                     $1.83B        $2.0B - $2.1B
    Year-over-year change                                  increase 9% - 15%
    Diluted earnings per share (EPS)              $0.34        $0.35 - $0.37
    Year-over-year change                                   increase 3% - 9%
    Diluted EPS attributable to QSI              ($0.01)              ($0.02)
    Diluted EPS attributable to estimated
     share-based compensation                    ($0.05)              ($0.05)
    Diluted EPS attributable to
     in-process R&D                              ($0.01)                 n/a
    Metrics
    MSM Shipments                         approx. 49M    approx. 55M - 57M
    CDMA/WCDMA handset units shipped      approx. 67M(i) approx. 82M - 86M(i)
    CDMA/WCDMA handset unit wholesale
     average selling price               approx. $208(i)      approx. $217(i)
    (i)Shipments in Dec. quarter, reported in Mar. quarter
    FISCAL YEAR
                                        Prior Guidance       Current Guidance
                         FY 2006           FY 2007                FY 2007
                         Results        Estimates(2)(3)         Estimates(2)
    QUALCOMM Pro Forma
    Revenues              $7.53B            $8.1B - $8.6B
    Year-over-year change               increase 8% - 14%     Reaffirm Prior
    Diluted earnings                                              Revenue
     per share (EPS)       $1.64            $1.72 - $1.77    and EPS Guidance
    Year-over-year change                increase 5% - 8%
    Total QUALCOMM (GAAP)
    Revenues              $7.53B            $8.1B - $8.6B     Reaffirm Prior
    Year-over-year change               increase 8% - 14%    Revenue Guidance
    Diluted earnings
     per share (EPS)       $1.44            $1.41 - $1.46       $1.44 - $1.49
    Year-over-year change       decrease 2% - increase 1%  even - increase 3%
    Diluted EPS
     attributable to
     in-process R&D       ($0.01)                     n/a                 n/a
    Diluted EPS
     attributable to
     QSI                  ($0.02)                  ($0.11)            ($0.10)
    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                      n/a              $0.02
    Metrics
    Fiscal year(ii)
     CDMA/WCDMA
     handset unit
     wholesale
     average
     selling
     price          approx. $215             approx. $205        approx. $210
    (ii)Shipments in Sept. to June quarters, reported in Dec. to Sept.
        quarters
    CALENDAR YEAR Handset Estimates
                                          Prior Guidance     Current Guidance
                                            Calendar 2006       Calendar 2006
    CDMA/WCDMA handset unit shipments         Estimates           Estimates
    March quarter                             approx. 66M         approx. 66M
    June quarter                              approx. 70M         approx. 70M
    September quarter                   approx. 74M - 76M         approx. 76M
    December quarter                         not provided   approx. 82M - 86M
    Calendar year range (approx.)             290M - 298M         294M - 298M
                                               Midpoint            Midpoint
    CDMA/WCDMA units                         approx. 294M        approx. 296M
    CDMA units                               approx. 196M        approx. 198M
    WCDMA units                               approx. 98M         approx. 98M
                                          Prior Guidance     Current Guidance
                                            Calendar 2007       Calendar 2007
    CDMA/WCDMA handset unit shipments         Estimates           Estimates
    March quarter                            not provided        not provided
    June quarter                             not provided        not provided
    September quarter                        not provided        not provided
    December quarter                         not provided        not provided
    Calendar year range (approx.)             368M - 388M
                                               Midpoint        Reaffirm Prior
    CDMA/WCDMA units                         approx. 378M       Calendar 2007
    CDMA units                               approx. 203M          Guidance
    WCDMA units                              approx. 175M
    (1) Current Q2'07 estimates incorporate the expected results related to
        acquisitions completed in the first quarter of fiscal 2007.
    (2) FY 2007 estimates do not reflect the potential adverse impact on our
        results, approximately US$0.04 to US$0.06 diluted earnings per share,
        of Nokia not paying royalties in the fourth quarter of fiscal 2007
        for June quarter shipments. Further details are included in the
        introductory paragraph which precedes this Business Outlook table.
    (3) Prior Guidance presented above incorporates the US$0.04 dilution
        estimate for FY 2007 provided on December 3, 2006 related to the
        acquisitions completed in the first quarter of fiscal 2007.
Sums may not equal totals due to rounding.
Results of Business Segments
The following tables, which present segment information, have been
adjusted to reflect the 2007 segment presentation (Notes 1 and 2) (in
millions, except per share data):
    First Quarter - Fiscal Year 2007
                                                                Reconciling
    Segments                    QCT(1)    QTL(1)    QWI(2)     Items(1)(2)(3)
    Revenues                   $1,230      $600      $188            $1
    Change from prior year        19%       14%        5%           N/M
    Change from prior quarter      7%       (9%)      (4%)          N/M
    EBT                          $316      $498       $20          $118
    Change from prior year        (7%)       4%       18%           N/M
    Change from prior quarter     (2%)     (16%)     (23%)          N/M
    Net income (loss)
    Change from prior year
    Change from prior quarter
    Diluted EPS
    Change from prior year
    Change from prior quarter
    Diluted shares used
                                   Estimated                           Total
                   QUALCOMM Pro   Share-Based        Tax             QUALCOMM
    Segments          Forma      Compensation(4)   Items(5)   QSI(6)   (GAAP)
    Revenues          $2,019           $--           $--        $--    $2,019
    Change from
     prior year          16%            --            --         --       16%
    Change from
     prior quarter        1%            --            --         --        1%
    EBT                 $952         $(130)          $--       $(43)     $779
    Change from
     prior year           5%           N/M           N/M        N/M        6%
    Change from
     prior quarter       (1%)          N/M           N/M        N/M      (4%)
    Net income (loss)   $722          $(86)          $33       $(21)     $648
    Change from
     prior year           8%           N/M           N/M        N/M        5%
    Change from
     prior quarter        2%           N/M           N/M        N/M        6%
    Diluted EPS        $0.43        $(0.05)        $0.02     $(0.01)    $0.38
    Change from
     prior year          10%           N/M           N/M        N/M        6%
    Change from
     prior quarter        2%           N/M           N/M        N/M        6%
    Diluted shares
     used              1,685         1,685         1,685      1,685     1,685
    Fourth Quarter - Fiscal Year 2006
                                                                Reconciling
    Segments                    QCT(1)    QTL(1)    QWI(2)     Items(1)(2)(3)
    Revenues                   $1,147      $661      $196           $(5)
    EBT                           323       591        26            21
    Net income (loss)
    Diluted EPS
    Diluted shares used
                             Estimated                                 Total
              QUALCOMM Pro  Share-Based      Tax    In-Process       QUALCOMM
    Segments     Forma     Compensation(4) Items(7)    R&D(8)  QSI(6)  (GAAP)
    Revenues    $1,999           $--         $--        $--      $--   $1,999
    EBT            961          (127)         --         (1)     (23)     810
    Net income
     (loss)        705           (76)        (16)        (1)       2      614
    Diluted EPS  $0.42        $(0.05)     $(0.01)       $--      $--    $0.36
    Diluted
     shares
     used        1,693         1,693       1,693      1,693    1,693    1,693
    First Quarter - Fiscal Year 2006
                                                                Reconciling
    Segments                    QCT(1)    QTL(1)    QWI(2)     Items(1)(2)(3)
    Revenues                   $1,033      $526      $179            $3
    EBT                           338       479        17            72
    Net income (loss)
    Diluted EPS
    Diluted shares used
                                   Estimated                           Total
                   QUALCOMM Pro   Share-Based        Tax             QUALCOMM
    Segments          Forma      Compensation(4)   Items(9)   QSI(6)   (GAAP)
    Revenues          $1,741           $--           $--        $--    $1,741
    EBT                  906          (122)           --        (48)      736
    Net income
     (loss)              667           (82)           56        (21)      620
    Diluted EPS        $0.39        $(0.05)        $0.03     $(0.01)    $0.36
    Diluted
     shares
     used              1,702         1,702         1,702      1,702     1,702
    Second Quarter - Fiscal Year 2006
                                                                Reconciling
    Segments                    QCT(1)    QTL(1)    QWI(2)     Items(1)(2)(3)
    Revenues                   $1,018      $640      $178           $(2)
    EBT                           291       587        16            68
    Net income (loss)
    Diluted EPS
    Diluted shares used
                                   Estimated                           Total
                   QUALCOMM Pro   Share-Based    In-Process          QUALCOMM
    Segments          Forma      Compensation(4)    R&D(8)    QSI(6)   (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
    Twelve Months - Fiscal Year 2006
                                                                Reconciling
    Segments                    QCT(1)    QTL(1)    QWI(2)     Items(1)(2)(3)
    Revenues                   $4,332    $2,467      $731           $(4)
    EBT                        $1,298    $2,233       $78          $197
    Net income (loss)
    Diluted EPS
    Diluted shares used
                             Estimated                                 Total
              QUALCOMM Pro  Share-Based   Tax Items  In-Process      QUALCOMM
    Segments     Forma     Compensation(4)  (7)(9)     R&D(8)    QSI   (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
    (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 to, among other reasons, recognize other value
        that QTL has increasingly been realizing from QCT. As a result, QCT
        did not record a royalty to QTL in the first quarter of fiscal 2007,
        and prior period segment information has been adjusted in the same
        manner for comparative purposes.
    (2) During the first quarter of fiscal 2007, the Company reorganized the
        QUALCOMM Wireless Systems (QWS) division, which sells products and
        services to Globalstar, into the QWBS division in the QWI segment.
        Revenues and operating results relating to the QWS business 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.
    (3) 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.
    (4) Certain share-based compensation is included in operating expenses
        as part of employee-related costs but is not allocated to our
        segments as such costs are not considered relevant by management in
        evaluating segment performance. 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.
    (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. We 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. Our first quarter fiscal 2007 QUALCOMM pro
        forma results exclude this tax benefit attributable to 2006.
    (6) 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 provision related to estimated
        share-based compensation from the tax provision for total QUALCOMM
        (GAAP).
    (7) During the fourth quarter of fiscal 2006, the Company refined its
        estimate of R&D costs allocable to the Company's foreign operations
        to reflect actual results and updated its forecast of future benefits
        under an intercompany cost sharing agreement. Due to this
        adjustment, the effective tax rate in the fourth quarter of fiscal
        2006 for total QUALCOMM (GAAP) includes US$33 million of tax expense,
        or US$0.02 per diluted share, related to fiscal 2004. In addition,
        the Company recorded a US$17 million tax benefit, or US$0.01 diluted
        earnings per share, related to the impact of prior year tax audits
        completed during the fourth quarter of fiscal 2006. For fiscal 2006
        pro forma presentation, results were adjusted to exclude these tax
        adjustments related to prior years.
    (8) During fiscal 2006, the Company recorded US$22 million of expenses
        related to acquired in-process R&D associated with three
        acquisitions completed during the year. US$21 million of this expense
        was recorded in the second quarter of fiscal 2006 and US$1 million
        was recorded in the fourth quarter of fiscal 2006. For fiscal 2006
        pro forma presentation, results were adjusted to exclude these
        expenses.
    (9) During the first quarter of fiscal 2006, the Company recorded a
        US$56 million tax benefit, or US$0.03 diluted earnings per share,
        related to the expected impact of prior year tax audits completed
        during that quarter. For fiscal 2006 pro forma presentation, results
        were adjusted to exclude this tax adjustment attributable to prior
        years.
N/M - Not Meaningful
Sums may not equal totals due to rounding.
Conference Call
QUALCOMM's first quarter fiscal 2007 earnings conference call will
be broadcast live on January 24, 2007 beginning at 1:45 p.m. Pacific
Standard Time (PST) 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 January 24, 2007 beginning at approximately 5:30 p.m.
(PST) through February 7, 2007 at 9:00 p.m. (PST). 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 4455735. 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 expense. 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
it 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 expense in fiscal 2006 is excluded
because such expense is incurred infrequently and 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 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 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.
    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 RESULTS
                      (In millions US, except per share data)
                                   (Unaudited)
                               Three Months Ended December 31, 2006
                                  Estimated                         Total
                      QUALCOMM   Share-Based                       QUALCOMM
                     Pro Forma  Compensation(a)  Tax Items   QSI    (GAAP)
    Revenues:
      Equipment and
       services        $1,342         $--            $--     $--    $1,342
      Licensing and
       royalty fees       677          --             --      --       677
        Total
         revenues       2,019          --             --      --     2,019
    Operating expenses:
      Cost of
       equipment
       and services
       revenues           624          10             --      --       634
      Research and
       development        365          58             --      17       440
      Selling,
       general and
       administrative     282          62             --      25       369
        Total
         operating
         expenses       1,271         130             --      42     1,443
    Operating income
     (loss)               748        (130)            --     (42)      576
    Investment
     income, net          204(b)       --             --      (1)(c)   203
    Income (loss)
     before income
     taxes                952        (130)            --     (43)      779
    Income tax
     (expense)
     benefit             (230)(d)      44             33      22(e)  (131)(d)
    Net income
     (loss)              $722        $(86)           $33    $(21)     $648
    Earnings (loss)
     per common share:
      Diluted           $0.43      $(0.05)         $0.02  $(0.01)    $0.38
    Shares used in
     per share
     calculations:
      Diluted           1,685       1,685          1,685   1,685     1,685
    Supplemental
     Financial Data:
    Operating Cash Flow  $834        $(32)(g)        $--    $(13)     $789
    Operating Cash Flow
     as a % of Revenues    41%                                          39%
    Free Cash Flow (f)   $544        $(32)(g)        $--    $(45)     $467
    Free Cash Flow
     as a % of Revenues    27%                                          23%
    (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$142 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$63 million in net realized gains on investments, partially offset
        by US$1 million in interest expense.
    (c) Includes US$1 million in losses on derivatives, US$1 million in
        interest expense and US$1 million in other-than-temporary losses on
        investments, partially offset by US$1 million in net realized gains
        on investments and US$1 million in interest and dividend income.
    (d) The first quarter of fiscal 2007 tax rates are approximately 17% 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
        provision related to estimated share-based compensation 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 Net Cash Provided by Operating Activities for Total
        QUALCOMM for the three months ended December 31, 2006, included
        herein.
    (g) Tax benefits from stock options exercised during the quarter.
                            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 December 31, 2006
                                           Estimated                  Total
                              QUALCOMM    Share-Based                QUALCOMM
                             Pro Forma    Compensation      QSI       (GAAP)
    Net cash provided (used)
     by operating activities    $834         $(32)(a)      $(13)       $789
    Less: capital expenditures  (290)          --           (32)       (322)
    Free cash flow              $544         $(32)         $(45)       $467
    Other supplemental
     cash disclosures:
      Cash transfers from
       QSI(1)                     $7          $--           $(7)        $--
      Cash transfers to
       QSI(2)                    (95)          --            95          --
      Net cash transfers
       from (to)/from QSI       $(88)         $--           $88         $--
    (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 December 25, 2005
                                           Estimated                  Total
                              QUALCOMM    Share-Based                QUALCOMM
                             Pro Forma    Compensation      QSI       (GAAP)
    Net cash provided (used)
     by operating activities    $713        $(101)(a)      $(16)       $596
    Less: capital
     expenditures               (182)          --           (31)       (213)
    Free cash flow              $531        $(101)         $(47)       $383
    (a) Tax benefits from stock options exercised during the period.
                            QUALCOMM Incorporated
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                      (In millions, except per share data)
                                 (Unaudited)
                                      ASSETS
                                                 December 31,   September 24,
                                                      2006           2006
    Current assets:
      Cash and cash equivalents                       $2,649         $1,607
      Marketable securities                            3,298          4,114
      Accounts receivable, net                           693            700
      Inventories                                        330            250
      Deferred tax assets                                229            235
      Other current assets                               180            143
        Total current assets                           7,379          7,049
    Marketable securities                              4,598          4,228
    Property, plant and equipment, net                 1,559          1,482
    Goodwill                                           1,320          1,230
    Deferred tax assets                                  441            512
    Other assets                                       1,041            707
        Total assets                                 $16,338        $15,208
                       LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Trade accounts payable                            $471           $420
      Payroll and other benefits related liabilities     205            273
      Dividend payable                                   198             --
      Unearned revenue                                   253            197
      Other current liabilities                          631            532
        Total current liabilities                      1,758          1,422
    Unearned revenue                                     144            141
    Other liabilities                                    261            239
        Total liabilities                              2,163          1,802
    Stockholders' equity:
      Preferred stock, $0.0001 par value;
       issuable in series; 8 shares authorized;
       none outstanding at December 31, 2006 and
       September 24, 2006                                 --             --
      Common stock, $0.0001 par value;
       6,000 shares authorized;
       1,655 and 1,652 shares issued and outstanding
       at December 31, 2006 and September 24, 2006,
       respectively                                       --             --
      Paid-in capital                                  7,427          7,242
      Retained earnings                                6,549          6,100
      Accumulated other comprehensive income             199             64
        Total stockholders' equity                    14,175         13,406
        Total liabilities and stockholders' equity   $16,338        $15,208
                            QUALCOMM Incorporated
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In millions, except per share data)
                                 (Unaudited)
                                                      Three Months Ended
                                                  December 31,   December 25,
                                                      2006           2005
    Revenues:
      Equipment and services                          $1,342         $1,150
      Licensing and royalty fees                         677            591
        Total revenues                                 2,019          1,741
    Operating expenses:
      Cost of equipment and services revenues            634            517
      Research and development                           440            340
      Selling, general and administrative                369            239
        Total operating expenses                       1,443          1,096
    Operating income                                     576            645
    Investment income, net                               203             91
    Income before income taxes                           779            736
    Income tax expense                                  (131)          (116)
    Net income                                          $648           $620
    Basic earnings per common share                    $0.39          $0.38
    Diluted earnings per common share                  $0.38          $0.36
    Shares used in per share calculations:
      Basic                                            1,653          1,645
      Diluted                                          1,685          1,702
    Dividends per share paid                             $--            $--
    Dividends per share announced                      $0.12          $0.09
                            QUALCOMM Incorporated
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In millions)
                                 (Unaudited)
                                                      Three Months Ended
                                                  December 31,   December 25,
                                                      2006           2005
    Operating Activities:
    Net income                                          $648           $620
    Adjustments to reconcile net income to
     net cash provided by operating activities:
      Depreciation and amortization                       91             58
      Non-cash portion of share-based
       compensation expense                              130            122
      Incremental tax benefits from
       stock options exercised                           (32)          (101)
      Net realized gains on marketable securities
       and other investments                             (64)           (20)
      Equity in losses of investees                       --             20
      Non-cash income tax expense                         54            104
      Other items, net                                     5            (16)
    Changes in assets and liabilities,
     net of effects of acquisitions:
      Accounts receivable, net                            (9)          (171)
      Inventories                                        (81)           (18)
      Other assets                                       (98)            16
      Trade accounts payable                              47             87
      Payroll, benefits and other liabilities             38            (86)
      Unearned revenue                                    60            (19)
      Net cash provided by operating activities          789            596
    Investing Activities:
      Capital expenditures                              (322)          (213)
      Purchases of available-for-sale securities      (1,673)        (3,318)
      Proceeds from sale of available-for-sale
       securities                                      2,436          2,160
      Other investments and acquisitions,
       net of cash acquired                             (220)            (6)
      Other items, net                                    (2)             4
      Net cash provided (used) by investing activities   219         (1,373)
    Financing Activities:
      Proceeds from issuance of common stock              97            181
      Repurchase and retirement of common stock          (96)            --
      Incremental tax benefits from stock options
       exercised                                          32            101
      Net cash provided by financing activities           33            282
      Effect of exchange rate changes on cash              1              2
    Net increase (decrease) in cash and
     cash equivalents                                  1,042           (493)
    Cash and cash equivalents at beginning of period   1,607          2,070
    Cash and cash equivalents at end of period        $2,649         $1,577
Web site: http://www.qualcomm.com

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

Plus de actualités: Qualcomm Incorporated
Plus de actualités: Qualcomm Incorporated
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  • 02.11.2006 – 23:26

    QUALCOMM Announces Fourth Quarter and Fiscal 2006 Results

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    QUALCOMM Announces Third Quarter Fiscal 2006 Results

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