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Abonner Qualcomm Incorporated

Qualcomm Incorporated

Qualcomm Announces Fourth Quarter and Fiscal 2007 Results

San Diego, November 8 (ots/PRNewswire)

  • Fiscal 2007 Revenues US$8.87 Billion, Diluted EPS US$1.95
  • Pro Forma Fiscal 2007 Revenues US$8.87 Billion, Diluted EPS US$2.01
  • Worldwide 3G Adoption Drives Record Fiscal Year Financial Results
Qualcomm Incorporated (Nasdaq: QCOM) today announced results for
the fourth fiscal quarter and year ended September 30, 2007.
Total Qualcomm (GAAP) Results
Total Qualcomm results are reported in accordance with generally
accepted accounting principles (GAAP).
    Fourth Quarter
    -- Revenues: US$2.31 billion, up 15 percent year-over-year and down
       1 percent sequentially.
    -- Net income: US$1.13 billion, up 84 percent year-over-year and 42
       percent sequentially.
    -- Diluted earnings per share: US$0.67, up 86 percent year-over-year and
       43 percent sequentially.
    -- Effective tax rate: negative 19 percent, due to a US$331 million
       benefit as a result of completing audits of prior years' tax returns.
    -- Estimated share-based compensation: US$78 million, net of tax, up
       3 percent year-over-year and 3 percent sequentially.
    -- Operating cash flow: US$1.04 billion, up 10 percent year-over-year;
       45 percent of revenues.
    -- Return of capital to stockholders: US$1.45 billion in the fourth
       quarter, including US$230 million of cash dividends, or US$0.14 per
       share, and US$1.22 billion to repurchase 31 million shares of our
       common stock.
    Fiscal 2007
    -- Revenues: US$8.87 billion, up 18 percent year-over-year.
    -- Net income: US$3.30 billion, up 34 percent year-over-year.
    -- Diluted earnings per share: US$1.95, up 35 percent year-over-year.
    -- Effective tax rate: 9 percent.
    -- Estimated share-based compensation: US$324 million, net of tax, up
       1 percent year-over-year.
    -- Operating cash flow: US$3.81 billion, up 17 percent year-over-year;
       43 percent of revenues.
    -- Return of capital to stockholders: US$2.34 billion, including
       US$862 million of cash dividends, or US$0.52 per share, and US$1.48
       billion to repurchase 37 million shares of our common stock.
Qualcomm Pro Forma Results
Pro forma results exclude the Qualcomm Strategic Initiatives (QSI)
segment, certain estimated share-based compensation, certain tax
items related to prior years and acquired in-process research and
development (R&D) expense.
    Fourth Quarter
    -- Revenues: US$2.31 billion, up 15 percent year-over-year and down
       1 percent sequentially.
    -- Net income: US$911 million, up 29 percent year-over-year and down
       2 percent sequentially.
    -- Diluted earnings per share: US$0.54, up 29 percent year-over-year and
       down 2 percent sequentially; excludes US$0.02 loss per share
       attributable to the QSI segment, US$0.05 loss per share attributable
       to certain estimated share-based compensation and US$0.20 earnings per
       share attributable to certain tax items related to prior years.
    -- Effective tax rate: 19 percent.
    -- Free cash flow: US$916 million, up 1 percent year-over-year; 40
       percent of revenues. (Defined as net cash from operating activities
       less capital expenditures).
    Fiscal 2007
    -- Revenues: US$8.87 billion, up 18 percent year-over-year.
    -- Net income: US$3.41 billion, up 21 percent year-over-year.
    -- Diluted earnings per share: US$2.01, up 23 percent year-over-year;
       excludes US$0.08 loss per share attributable to the QSI segment,
       US$0.19 loss per share attributable to certain share-based
       compensation, US$0.22 earnings per share attributable to certain tax
       items related to prior years and US$0.01 loss per share attributable
       to acquired in-process R&D.
    -- Effective tax rate: 22 percent.
    -- Free cash flow: US$3.53 billion, up 11 percent year-over-year; 40
       percent of revenues. (Defined as net cash from operating activities
       less capital expenditures).
Detailed reconciliations between total Qualcomm (GAAP) results and
cash flow 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
http://www.qualcomm.com.
"We delivered another record performance in fiscal 2007 because
our employees and partners continue to provide industry leading
innovative wireless products and services," said Dr. Paul E. Jacobs,
chief executive officer of Qualcomm. "We achieved record revenues,
net income and operating cash flow and returned a record US$2.3
billion of capital to our stockholders through our cash dividend and
stock repurchase programs."
"In addition to our strong business and financial performance, our
focused execution resulted in many significant achievements in fiscal
2007. More than 530 million wireless subscribers are now benefiting
from the widespread and accelerating availability of 3G CDMA mobile
broadband networks with advanced wireless devices at competitive
prices. We shipped a record 253 million Mobile Station Modem(TM)
(MSM(TM)) chips, a 22% year-over-year increase, and for the second
quarter in a row we were named the world's top supplier of
semiconductors for wireless applications by iSuppli. We continued to
expand our chipset portfolio with the addition of the 7000 series
platform for high performance wireless devices and a low cost single
chip for EV-DO Rev. A mobile broadband."
"In close partnership with the world's leading content providers,
our MediaFLO(TM) mobile TV service is now commercially available in
the United States and in trials around the world. With ground
breaking innovations, such as MediaFLO, Snapdragon(TM) and Gobi(TM),
and by partnering with new market entrants, such as Google and Skype,
Qualcomm is expanding the impact of 3G CDMA beyond traditional
products, services and partners."
Cash and Marketable Securities
Qualcomm's cash, cash equivalents and marketable securities
totaled approximately US$11.8 billion at the end of the fourth
quarter of fiscal 2007, compared to US$12.3 billion at the end of the
third quarter of fiscal 2007 and US$9.9 billion a year ago. As of
September 30, 2007, US$1.5 billion remained authorized for
repurchases under our stock repurchase program. From October 1, 2007
through November 7, 2007, we repurchased and retired 13  million
shares of our common stock for approximately US$525 million. On
October 11, 2007, we announced a cash dividend of US$0.14 per share
payable  on January 4, 2008 to stockholders of record at the close of
business on  December 7, 2007.
Estimated Share-Based Compensation
Total Qualcomm (GAAP) net income for the fourth quarter of fiscal
2007 included estimated share-based compensation, net of tax, of
US$78 million, or US$0.05 per diluted share. This compares to US$76
million, or US$0.05 per diluted share, in the prior year quarter.
    (All amounts in US Dollars unless otherwise noted.)
    Research and Development
                                    Estimated                         Total
                     Qualcomm Pro  Share-Based   In-Process         Qualcomm
    ($ in millions)      Forma     Compensation      R&D      QSI    (GAAP)
    Fourth quarter
     fiscal 2007        $410           $55           $-       $16     $481
    As a % of revenue     18%                                 N/M       21%
    Fourth quarter
     fiscal 2006        $338           $56           $1       $16     $411
    As a % of revenue     17%                                           21%
    Year-over-year
     change ($)           21%           (2%)                            17%
Pro forma R&D expenses increased 21 percent year-over-year,
primarily due to additional engineering resources for the development
of integrated circuit products, next generation CDMA and OFDMA
technologies, the expansion of our intellectual property portfolio
and other initiatives to support the acceleration of advanced
wireless products and services, including lower cost phones, the
integration of wireless with consumer electronics and computing, the
convergence of multiband, multimode, multinetwork products and
technologies, third party operating systems and services platforms.
QSI R&D expenses were related to MediaFLO USA.
    Selling, General and Administrative
                                             Estimated              Total
                                 Qualcomm   Share-Based           Qualcomm
    ($ in millions)              Pro Forma  Compensation    QSI    (GAAP)
    Fourth quarter fiscal 2007     $248         $53         $22     $323
    As a % of revenue                11%                    N/M       14%
    Fourth quarter fiscal 2006     $237         $62         $22     $321
    As a % of revenue                12%                              16%
    Year-over-year change ($)         5%        (15%)                  1%
Pro forma selling, general and administrative (SG&A) expenses
increased 5 percent year-over-year, largely attributable to increases
in costs related  to litigation and other legal matters, employee
related expenses and other  professional fees, partially offset by a
gain on the sale of a building. QSI  SG&A expenses were primarily
related to MediaFLO USA.
Effective Income Tax Rate
Our fiscal 2007 effective income tax rate for total Qualcomm
(GAAP) was 9 percent, and our fiscal 2007 pro forma effective tax
rate was 22 percent.  Our total Qualcomm (GAAP) diluted earnings per
share in the fourth quarter  and fiscal 2007 included a US$0.20
benefit as a result of prior year tax  audits completed during the
fourth fiscal quarter. This benefit resulted in a  negative tax rate
for the fourth quarter of fiscal 2007 for total Qualcomm  (GAAP).
Fourth quarter fiscal 2007 Qualcomm pro forma results excluded this
US$0.20 diluted earnings per share benefit to provide a clearer
understanding  of our ongoing tax rate and after tax earnings.
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 fourth quarter of fiscal 2007
included US$0.02 loss per share for the QSI segment. The fourth
quarter of fiscal 2007 QSI results included US$63 million in
operating expenses, primarily related to MediaFLO USA.
Business Outlook
The following statements are forward-looking and actual results
may differ materially. The "Note Regarding Forward-Looking
Statements" at the end of this news release provides a description of
certain risks that we face, and our annual and quarterly reports on
file with the Securities and Exchange Commission (SEC) provide a more
complete description of risks. Due to their nature, certain income
and expense items, such as realized investment gains or losses, gains
and losses on certain derivative instruments or asset impairments,
cannot be accurately forecast. Accordingly, we exclude forecasts of
such items from our business outlook, and actual results may vary
materially from the business outlook if we incur any such income or
expense items. In addition, our outlook does not include provisions
for the consequences of injunctions or significant possible damages
or costs related to litigation matters unless damages have been
awarded by a court.
We are engaged in multiple disputes with Nokia Corp., including
arbitration over Nokia's obligation to pay royalties for the use of
certain of our patents. As a result, under generally accepted
accounting principles, we are not recording royalty revenue
attributable to Nokia's sales after April 9, 2007 until an arbitrator
(or court) awards damages or the disputes are otherwise resolved by
agreement with Nokia. We have excluded from our fiscal 2008 revenue
and earnings guidance our estimate of royalties which we believe
Nokia is required to report and pay to us under our existing license
agreement in fiscal 2008 of approximately US$0.25-US$0.30 diluted
earnings per share.
We perform periodic audits of the royalties payable by our
licensees. As a result of our audit process, we determined during the
fourth quarter of fiscal 2007 that total CDMA-based handset unit
shipments and average selling prices (ASPs) should be adjusted for
certain periods. The adjustments related only to handset shipments
and ASPs and did not impact the amount or timing of our revenue.
Based on this new information, we now estimate shipments of 89
million handsets reported in our fourth quarter fiscal 2007, compared
to our  previous estimate of 92 million handsets. The estimated ASP
for such units  remains unchanged from our prior guidance of US$218.
A summary of the  adjustments on prior periods is included on our
Investor Relations website http://investor.qualcomm.com/results.cfm .
The following table summarizes total Qualcomm (GAAP) and Qualcomm
pro forma guidance for the first fiscal quarter and fiscal year 2008
based on the current business outlook. The pro forma business outlook
provided below is presented in a manner that is consistent with the
presentation of pro forma results provided elsewhere herein.
The following estimates are approximations and are based on the
current business outlook:
                             Business Outlook Summary
    FIRST FISCAL QUARTER
                                                         Current Guidance
                                             Q1'07             Q1'08
                                            Results          Estimates
      Qualcomm Pro Forma
      Revenues                               $2.02B         $2.3B - $2.4B
      Year-over-year change                             increase 14% - 19%
      Diluted earnings per share (EPS)        $0.43         $0.50 - $0.52
      Year-over-year change                             increase 16% - 21%
      Total Qualcomm (GAAP)
      Revenues                               $2.02B         $2.3B - $2.4B
      Year-over-year change                             increase 14% - 19%
      Diluted earnings per share (EPS)        $0.38         $0.42 - $0.44
      Year-over-year change                             increase 11% - 16%
      Diluted EPS attributable to QSI        ($0.01)               ($0.03)
      Diluted EPS attributable to
       estimated share-based compensation    ($0.05)               ($0.05)
      Diluted EPS attributable to tax
       items                                  $0.02                   n/a
      Metrics
      MSM shipments                     approx. 59M      approx. 74M - 78M
      CDMA/WCDMA handset units
       shipped (1)(2)                   approx. 74M(i)   approx. 95M - 98M(i)
      CDMA/WCDMA handset unit wholesale
       average selling price (1)(2)    approx. $208(i)        approx. $212(i)
      (i) Shipments in Sept. quarter, reported in Dec. quarter
    FISCAL YEAR
                                                            Current Guidance
                                            FY 2007             FY 2008
                                           Results (3)        Estimates (4)
      Qualcomm Pro Forma
      Revenues                                $8.87B          $9.5B - $9.9B
      Year-over-year change                               increase 7% - 12%
      Diluted earnings per share (EPS)        $2.01          $2.03 - $2.09
      Year-over-year change                                increase 1% - 4%
      Total Qualcomm (GAAP)
      Revenues                                $8.87B          $9.5B - $9.9B
      Year-over-year change                               increase 7% - 12%
      Diluted earnings per share (EPS)        $1.95          $1.68 - $1.74
      Year-over-year change                              decrease 11% - 14%
      Diluted EPS attributable to tax
       items related to prior years           $0.22                    n/a
      Diluted EPS attributable to
       in-process R&D                        ($0.01)                   n/a
      Diluted EPS attributable to QSI        ($0.08)                ($0.14)
      Diluted EPS attributable to
       estimated share-based compensation    ($0.19)                ($0.21)
      Metrics
      Fiscal year(i) CDMA/WCDMA handset
       unit wholesale average selling
       price (1)(2)                    approx. $214           approx. $199
      (i) Shipments in Sept. to June quarters, reported in Dec. to Sept.
          quarters
    CALENDAR YEAR Handset Estimates (1)(2)
                           Prior Guidance  Current Guidance  Current Guidance
    CDMA/WCDMA handset     Calendar 2007     Calendar 2007     Calendar 2008
     unit shipments         Estimates (5)      Estimates         Estimates
      March quarter          approx. 86M        approx. 86M     not provided
      June quarter           approx. 89M        approx. 89M     not provided
      September quarter     not provided  approx. 95M - 98M     not provided
      December quarter      not provided       not provided     not provided
      Calendar year range
      (approx.)              367M - 387M        385M - 395M      492M - 522M
                              Midpoint           Midpoint         Midpoint
      CDMA/WCDMA units      approx. 377M       approx. 390M     approx. 507M
      CDMA units            approx. 208M       approx. 208M     approx. 223M
      WCDMA units           approx. 169M       approx. 182M     approx. 284M
    (1) CDMA/WCDMA handset unit shipments and average selling prices are
        estimated for the total market.
    (2) We perform periodic audits of the royalties payable by our licensees.
        As a result of our audit process, we determined during the fourth
        quarter of fiscal 2007 that total CDMA-based handset unit shipments
        and average selling prices (ASPs) should be adjusted for certain
        periods. The adjustments related only to handset shipments and ASPs
        and did not impact the amount or timing of our revenue. Historical
        units presented herein have been adjusted to reflect these
        adjustments.
    (3) Our fiscal 2007 results do not include royalty revenue attributable to
        Nokia's sales after April 9, 2007 which we estimated to be
        approximately US$0.05 diluted earnings per share.
    (4) We have excluded from our fiscal 2008 revenue and earnings guidance
        our estimate of royalties which we believe Nokia is required to report
        and pay to us under our existing license agreement in fiscal 2008 of
        approximately US$0.25-US$0.30 diluted earnings per share.
    (5) Prior Calendar 2007 Handset Estimates have been adjusted to reflect
        adjustments as a result of note (2) above in order to present "Prior"
        and "Current" guidance on a consistent and comparable basis.
    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 fiscal 2007 segment presentation (Note 1) (in
millions, except per share data):
    Fourth Quarter - Fiscal Year 2007
    Segments                   QCT          QTL          QWI     Reconciling
                                                                   Items (2)
    Revenues                $1,419         $647         $245         $(6)
    Change from prior year      24%          (2%)         25%        N/M
    Change from prior quarter    4%         (16%)         25%        N/M
    EBT                       $424         $537          $31        $137
    Change from prior year      31%          (9%)         19%        N/M
    Change from prior quarter   (3%)        (20%)         72%        N/M
    EBT as a % of revenues      30%          83%          13%        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 Items            Qualcomm
    Segments        Forma     Compensation(3)    (4)       QSI(6)   (GAAP)
    Revenues       $2,305           $-           $-          $1    $2,306
    Change from
     prior year       15%                                              15%
    Change from
     prior quarter    (1%)                                             (1%)
    EBT           $1,129         $(117)          $-        $(64)     $948
    Change from
     prior year       17%           (8%)                    178%       17%
    Change from
     prior quarter    (4%)           3%                     (30%)      (2%)
    EBT as a % of
     revenues         49%          N/M          N/M         N/M        41%
    Net income
     (loss)          $911         $(77)        $331        $(34)   $1,131
    Change from
     prior year        29%           1%         N/M         N/M        84%
    Change from
     prior quarter     (2%)          3%         N/M         (44%)      42%
    Diluted EPS     $0.54       $(0.05)       $0.20      $(0.02)    $0.67
    Change from
     prior year        29%           0%         N/M         N/M        86%
    Change from
     prior quarter     (2%)         25%         N/M         (50%)      43%
    Diluted shares
     used           1,689        1,689        1,689       1,689     1,689
    Third Quarter - Fiscal Year 2007
                                                                  Reconciling
    Segments                   QCT          QTL         QWI        Items (2)
    Revenues                $1,367         $766         $196         $(4)
    EBT                        439          668           18          52
    Net income (loss)
    Diluted EPS
    Diluted shares used
                                        Estimated                   Total
                         Qualcomm Pro  Share-Based                Qualcomm
    Segments                 Forma    Compensation(3)   QSI(6)     (GAAP)
    Revenues                $2,325           $-           $-       $2,325
    EBT                      1,177        (114)         (91)          972
    Net income (loss)          934         (75)         (61)          798
    Diluted EPS              $0.55      $(0.04)      $(0.04)        $0.47
    Diluted shares used      1,704        1,704        1,704        1,704
    Fourth Quarter - Fiscal Year 2006
                                                                Reconciling
    Segments              QCT(1)(i)    QTL(1)(i)   QWI (1)(i) Items (1)(2)(i)
    Revenues                $1,147         $661         $196        $(5)
    EBT                        323          591           26         21
    Net income (loss)
    Diluted EPS
    Diluted shares used
                            Estimated                 In-              Total
               Qualcomm    Share-Based              Process          Qualcomm
    Segments   Pro Forma  Compensation(3) Tax Items   R&D     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 2007
                                                                Reconciling
    Segments              QCT(1)(i)    QTL(1)(i)   QWI (1)(i)  Items(1)(2)(i)
    Revenues                $1,230         $600         $188          $1
    EBT                        316          498           20         118
    Net income (loss)
    Diluted EPS
    Diluted shares used
                               Estimated                              Total
                  Qualcomm    Share-Based     Tax Items             Qualcomm
    Segments     Pro Forma   Compensation(3)     (5)       QSI(6)    (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
    Twelve Months - Fiscal Year 2007
                                                                 Reconciling
    Segments                  QCT          QTL          QWI       Items (2)
    Revenues                $5,275       $2,772         $828         $(5)
    Change from prior year      22%          12%          13%        N/M
    EBT                     $1,547       $2,340          $88        $388
    Change from prior year      19%           5%          13%        N/M
    EBT as a % of revenues      29%          84%          11%        N/M
    Net income (loss)
    Change from prior year
    Diluted EPS
    Change from prior year
    Diluted shares used
                               Estimated               In-             Total
                   Qualcomm   Share-Based   Tax Items Process        Qualcomm
    Segments      Pro Forma  Compensation(3)  (4)(5)   R&D     QSI    (GAAP)
    Revenues       $8,870          $-           $-      $-      $1    $8,871
    Change from
     prior year        18%                                     N/M        18%
    EBT            $4,363       $(487)          $-    $(10)  $(240)   $3,626
    Change from
     prior year        15%         (2%)                (55%)    80%       15%
    EBT as a % of
     revenues          49%        N/M          N/M     N/M     N/M        41%
    Net income
     (loss)         3,406        (321)         364      (9)   (137)   $3,303
    Change from
     prior year        21%          0%         810%    (59%)   328%       34%
    Diluted EPS     $2.01      $(0.19)       $0.22  $(0.01) $(0.08)    $1.95
    Change from
     prior year        23%          0%        1000%      0%    300%       35%
    Diluted shares
     used           1,693       1,693        1,693   1,693   1,693     1,693
    Twelve Months - Fiscal Year 2006
                                                                Reconciling
    Segments              QCT(1)(i)    QTL(1)(i)   QWI (1)(i) Items (1)(2)(i)
    Revenues                $4,332       $2,467         $731         $(4)
    EBT                      1,298        2,233           78         197
    Net income (loss)
    Diluted EPS
    Diluted shares used
                               Estimated                  In-         Total
                  Qualcomm    Share-Based               Process      Qualcomm
    Segments      Pro Forma  Compensation(3)  Tax Items   R&D   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 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 fiscal 2007.  The
        Company also reorganized the Qualcomm Wireless Systems (QWS) division
        into the QES (formerly 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 intersegment 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) During the fourth quarter of fiscal 2007, the Company recorded a
        US$331 million tax benefit, or US$0.20 diluted earnings per share,
        related to tax expense recorded in prior years resulting from the
        completion of tax audits during the fourth fiscal quarter. The fiscal
        2007 Qualcomm pro forma results excluded this tax benefit
        attributable to prior years.
    (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 fiscal 2007 Qualcomm pro
        forma results excluded this tax benefit attributable to fiscal 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 items
        column and the tax provisions related to estimated share-based
        compensation and in-process R&D from the tax provision for total
        Qualcomm (GAAP).
    N/M - Not Meaningful
    Sums may not equal totals due to rounding.
    (i) As adjusted to conform to 2007 segment presentation.
Conference Call
Qualcomm's fourth quarter fiscal 2007 earnings conference call
will be broadcast live on November 8, 2007 beginning at 1:45 p.m.
Pacific Standard Time (PST) on the Company's web site at:
http://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 http://www.qualcomm.com
immediately prior to commencement of the call. A taped audio replay
will be available via telephone on November 8, 2007 beginning at
approximately 5:30 p.m. (PST) through December 8, 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 20553158. An
audio replay of the conference call will be available on the
Company's web site at http://www.qualcomm.com for two weeks following
the live call.
Editor's Note: To view the web slides that accompany this earnings
release and conference call, please go to the Qualcomm Investor
Relations website at http://investor.qualcomm.com/results.cfm.
Qualcomm Incorporated (http://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 2007 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 using pro forma information. As a
result, management compensation decisions and the review of executive
compensation by the Compensation Committee of the Board of Directors
focus primarily on pro forma financial measures applicable to the
Company and its business segments.
Pro forma information used by management excludes the Qualcomm
Strategic Initiatives (QSI) segment, certain estimated share-based
compensation, certain tax items related to prior years and acquired
in-process R&D. The QSI segment is excluded because the Company
expects to exit its strategic investments at various times and the
effects of fluctuations in the value of such investments are viewed
by management as unrelated to the Company's operational performance.
Estimated share-based compensation, other than amounts related to
share-based awards granted under 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. Further, share-based compensation
is affected by factors that are subject to change, including the
Company's stock price, stock market volatility, expected option life,
risk-free interest rates and expected dividend payouts in future
years. Moreover, it is generally not an expense that requires or will
require cash payment by the Company. Certain tax items 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 between 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 deployment of our
technologies in wireless networks and of 3G wireless communications,
equipment and services, including CDMA2000 1X, 1xEV-DO, WCDMA, HSPA
and OFDMA both domestically and internationally; our dependence on
major customers and licensees; attacks on our business model,
including results of current and future litigation and arbitration
proceedings as well as actions of governmental or  quasi-governmental
bodies, and the costs we incur in connection therewith, including
potentially damaged relationships with customers and operators who
may be impacted by the results of these proceedings; fluctuations in
the demand for products, services or applications based on our
technologies; 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 Qualcomm
               Pro Forma results to Total Qualcomm (GAAP) results
                       (In millions, except per share data)
                                   (Unaudited)
                                  Three Months Ended September 30, 2007
                        Qualcomm      Estimated                        Total
                          Pro        Share-Based       Tax           Qualcomm
                         Forma      Compensation(a)  Items(b)  QSI    (GAAP)
    Revenues:
      Equipment and
       services         $1,568            $-           $-       $1   $1,569
      Licensing and
       royalty fees        737             -            -        -      737
        Total revenues   2,305             -            -        1    2,306
    Operating expenses:
      Cost of equipment
       and services
       revenues            691             9            -       25      725
      Research and
       development         410            55            -       16      481
      Selling, general
       and administrative  248            53            -       22      323
          Total operating
           expenses      1,349           117            -       63    1,529
    Operating income
     (loss)                956          (117)           -      (62)     777
    Investment income
     (expense), net        173 (c)         -            -       (2)(d)  171
    Income (loss) before
     income taxes        1,129          (117)           -      (64)     948
    Income tax (expense)
     benefit              (218)(e)        40          331       30 (f)  183(e)
    Net income (loss)     $911          $(77)        $331     $(34)  $1,131
    Earnings (loss) per
     common share:
       Diluted           $0.54        $(0.05)       $0.20   $(0.02)   $0.67
    Shares used in per
     share calculations:
       Diluted           1,689         1,689        1,689    1,689    1,689
    Supplemental Financial Data:
    Operating Cash Flow $1,136          $(41)(h)       $-     $(52)  $1,043
    Operating Cash Flow
     as a % of Revenues     49%                                N/M       45%
    Free Cash Flow (g)    $916          $(41)(h)       $-     $(79)    $796
    Free Cash Flow as a
     % of Revenues          40%                                N/M       35%
    (a) Estimated share-based compensation presented above and excluded from
        pro forma results did not include US$1 million, net of tax, related
        to share-based awards granted under the executive bonus program.
    (b) During the fourth quarter of fiscal 2007, the Company recorded a
        US$331 million tax benefit, or US$0.20 diluted earnings per share,
        related to tax expense recorded in prior years resulting from the
        completion of tax audits during the fourth fiscal quarter. The fiscal
        2007 Qualcomm pro forma results excluded this tax benefit
        attributable to prior years.
    (c) Included US$141 million in interest and dividend income related to
        cash, cash equivalents and marketable securities, which were not part
        of the Company's strategic investment portfolio, US$48 million in net
        realized gains on investments and US$2 million in gains on derivative
        instruments from decreases in the fair value of the put option
        liabilities related to our share repurchase program, partially offset
        by US$13 million in other-than-temporary losses on investments and
        US$5 million in interest expense.
    (d) Included US$3 million in other-than-temporary losses on investments,
        US$1 million in interest expense and US$1 million of equity losses in
        investees, partially offset by US$2 million in net realized gains on
        investments and US$1 million in interest and dividend income.
    (e) The fourth quarter of fiscal 2007 tax rates were approximately 19%
        benefit for total Qualcomm (GAAP) and approximately 19% expense for
        Qualcomm pro forma.
    (f) 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 items
        column and the tax provisions related to estimated share-based
        compensation and in-process R&D from the tax provision for total
        Qualcomm (GAAP).
    (g) 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 (GAAP) net cash provided by operating
        activities and other supplemental disclosures for the three months
        ended September 30, 2007, included herein.
    (h) Incremental tax benefits from stock options exercised during the
        period.
                             Qualcomm Incorporated
                     CONSOLIDATED STATEMENTS OF OPERATIONS
        This schedule is to assist the reader in reconciling from Qualcomm
               Pro Forma results to Total Qualcomm (GAAP) results
                     (In millions, except per share data)
                                 (Unaudited)
                                Twelve Months Ended September 30, 2007
                                 Estimated
                                   Share-
                        Qualcomm   Based      Tax     In-            Total
                          Pro      Compen-   Items  Process        Qualcomm
                         Forma    sation (a)  (b)     R&D    QSI   (GAAP)
    Revenues:
      Equipment and
       services         $5,764       $-        $-      $-     $1   $5,765
      Licensing and
       royalty fees      3,106        -         -       -      -    3,106
        Total revenues   8,870        -         -       -      1    8,871
    Operating expenses:
      Cost of equipment
       and services
       revenues          2,572       39         -       -     70    2,681
      Research and
       development       1,530      221         -      10     68    1,829
      Selling,
       general and
       administrative    1,138      227         -       -    113    1,478
          Total operating
           expenses      5,240      487         -      10    251    5,988
    Operating income
     (loss)              3,630     (487)        -     (10)  (250)   2,883
    Investment income,
     net                   733 (c)    -         -       -     10 (d)  743
    Income (loss) before
     income taxes        4,363     (487)        -     (10)  (240)   3,626
    Income tax (expense)
     benefit              (957)(e)  166       364       1    103     (323)(e)
    Net income (loss)   $3,406    $(321)     $364     $(9) $(137)  $3,303
    Earnings (loss) per
     common share:
       Diluted           $2.01   $(0.19)    $0.22  $(0.01) $(0.08)   $1.95
    Shares used in per
     share calculations:
       Diluted           1,693    1,693     1,693   1,693   1,693    1,693
    Supplemental
     Financial Data:
    Operating Cash Flow $4,252    $(240)(g)    $-    $(10)  $(191)  $3,811
    Operating Cash Flow
     as a % of Revenue      48%                               N/M       43%
    Free Cash Flow (f)  $3,526    $(240)(g)    $-    $(10)  $(283)  $2,993
    Free Cash Flow as a
     % of Revenue           40%                               N/M       34%
    (a) Estimated share-based compensation presented above and excluded from
        pro forma results did not include US$3 million, net of tax, related
        to share-based awards granted under the executive bonus program.
    (b) During the first quarter of fiscal 2007, 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 a
        retroactive extension the federal R&D tax credit that expired on
        December 31, 2005. In addition, during the fourth quarter of fiscal
        2007, the Company recorded a US$331 million tax benefit, or US$0.20
        diluted earnings per share, related to tax expense recorded in prior
        years resulting from the completion of tax audits during the fourth
        fiscal quarter. The fiscal 2007 Qualcomm pro forma results excluded
        these tax benefits attributable to prior years.
    (c) Included US$551 million in interest and dividend income related to
        cash, cash equivalents and marketable securities, which were not part
        of the Company's strategic investment portfolio, US$201 million in
        net realized gains on investments and US$3 million in gains on
        derivative instruments from decreases in the fair value of the put
        option liabilities related to our share repurchase program, partially
        offset by US$16 million in other-than-temporary losses on investments
        and US$6 million in interest expense.
    (d) Included US$21 million in net realized gains on investments and
        US$7 million in interest and dividend income, partially offset by
        US$11 million in other-than-temporary losses on investments, US$5
        million in interest expense, US$1 million in losses on derivative
        instruments and US$1 million in equity losses of investees.
    (e) The annual effective tax rate for fiscal 2007 for total Qualcomm
        (GAAP) was approximately 9% and Qualcomm pro forma was approximately
        22%.
    (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 (GAAP) net cash provided by operating
        activities and other supplemental disclosures for the twelve months
        ended September 30, 2007, included herein.
    (g) Incremental tax benefits from stock options exercised during the
        period.
                              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 September 30, 2007
                                                 Estimated           Total
                                    Qualcomm    Share-Based         Qualcomm
                                    Pro Forma   Compensation   QSI   (GAAP)
      Net cash provided (used) by
       operating activities          $1,136       $(41)(a)    $(52)  $1,043
      Less:  capital expenditures      (220)         -         (27)    (247)
      Free cash flow                   $916       $(41)       $(79)    $796
      Other supplemental cash
       disclosures:
         Cash transfers from QSI (1)     $2         $-         $(2)      $-
         Cash transfers to QSI (2)      (94)         -          94        -
         Net cash transfers            $(92)        $-         $92       $-
                                   Twelve Months Ended September 30, 2007
                                       Estimated                       Total
                         Qualcomm    Share-Based   In-Process        Qualcomm
                         Pro Forma   Compensation     R&D     QSI      (GAAP)
      Net cash
       provided (used)
       by operating
       activities         $4,252      $(240)(a)      $(10)   $(191)   $3,811
      Less:  capital
       expenditures         (726)         -             -      (92)     (818)
      Free cash flow      $3,526      $(240)         $(10)   $(283)   $2,993
      Other supplemental
       cash disclosures:
         Cash transfers
          from QSI(1)        $55         $-            $-     $(55)       $-
         Cash transfers
          to QSI(2)         (358)         -             -      358         -
         Net cash
          transfers        $(303)        $-            $-     $303        $-
      (1) Cash from loan payments and sale of equity securities.
      (2) Funding for strategic debt and equity investments, capital
          expenditures and other QSI operating expenses.
                                        Three Months Ended September 24, 2006
                                                 Estimated            Total
                                    Qualcomm    Share-Based          Qualcomm
                                    Pro Forma   Compensation   QSI    (GAAP)
      Net cash provided (used) by
       operating activities           $1,007      $(27)(a)    $(28)    $952
      Less:  capital expenditures       (100)        -         (29)    (129)
      Free cash flow                    $907      $(27)       $(57)    $823
                                     Twelve Months Ended September 24, 2006
                                                 Estimated           Total
                                    Qualcomm    Share-Based         Qualcomm
                                    Pro Forma   Compensation   QSI   (GAAP)
      Net cash provided (used) by
       operating activities           $3,746     $(403)(a)    $(90)  $3,253
      Less:  capital expenditures       (566)        -        (119)    (685)
      Free cash flow                  $3,180     $(403)      $(209)  $2,568
      (a) Incremental tax benefits from stock options exercised during the
          period.
                             Qualcomm Incorporated
                          CONSOLIDATED BALANCE SHEETS
                      (In millions, except per share data)
                                  (Unaudited)
                                    ASSETS
                                               September 30,    September 24,
                                                   2007              2006
          Current assets:
            Cash and cash equivalents            $2,411            $1,607
            Marketable securities                 4,170             4,114
            Accounts receivable, net                715               700
            Inventories                             469               250
            Deferred tax assets                     435               235
            Collateral held under
             securities lending                     421                 -
            Other current assets                    200               143
                    Total current assets          8,821             7,049
          Marketable securities                   5,234             4,228
          Property, plant and equipment, net      1,788             1,482
          Goodwill                                1,325             1,230
          Deferred tax assets                       318               512
          Other assets                            1,009               707
                    Total assets                $18,495           $15,208
                      LIABILITIES AND STOCKHOLDERS' EQUITY
          Current liabilities:
            Trade accounts payable                 $635              $420
            Payroll and other benefits
             related liabilities                    311               273
            Unearned revenue                        218               197
            Income taxes payable                    119               137
            Obligation under securities
             lending                                421                 -
            Other current liabilities               554               395
                   Total current liabilities      2,258             1,422
          Unearned revenue                          142               141
          Other liabilities                         260               239
                   Total liabilities              2,660             1,802
          Stockholders' equity:
            Preferred stock, $0.0001 par value;
             issuable in series; 8 shares
             authorized; none outstanding at
             September 30, 2007 and
             September 24, 2006                       -                 -
            Common stock, $0.0001 par value;
             6,000 shares authorized; 1,646 and
             1,652 shares issued and outstanding
             at September 30, 2007 and
             September 24, 2006, respectively         -                 -
            Paid-in capital                       7,057             7,242
            Retained earnings                     8,541             6,100
            Accumulated other
             comprehensive income                   237                64
                   Total stockholders'
                    equity                       15,835            13,406
                   Total liabilities and
                    stockholders' equity        $18,495           $15,208
                                Qualcomm Incorporated
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                         (In millions, except per share data)
                                     (Unaudited)
                                     Three Months Ended  Twelve Months Ended
                                    September September  September September
                                       30,       24,        30,       24,
                                      2007      2006       2007      2006
          Revenues:
            Equipment and services  $1,569     $1,264     $5,765    $4,776
            Licensing and royalty
             fees                      737        735      3,106     2,750
               Total revenues        2,306      1,999      8,871     7,526
          Operating expenses:
            Cost of equipment and
             services revenues         725        586      2,681     2,182
            Research and development   481        411      1,829     1,538
            Selling, general and
             administrative            323        321      1,478     1,116
               Total operating
                expenses             1,529      1,318      5,988     4,836
          Operating income             777        681      2,883     2,690
          Investment income, net       171        129        743       466
          Income before income taxes   948        810      3,626     3,156
          Income tax expense           183       (196)      (323)     (686)
          Net income                $1,131       $614     $3,303    $2,470
          Basic earnings per common
           share                     $0.68      $0.37      $1.99     $1.49
          Diluted earnings per common
           share                     $0.67      $0.36      $1.95     $1.44
          Shares used in per share
           calculations:
             Basic                   1,660      1,652      1,660     1,659
             Diluted                 1,689      1,693      1,693     1,711
          Dividends per share paid   $0.14      $0.12      $0.52     $0.42
          Dividends per share
           announced                 $0.14      $0.12      $0.52     $0.42
                              Qualcomm Incorporated
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (In millions)
                                   (Unaudited)
                                    Three Months Ended   Twelve Months Ended
                                   September  September  September  September
                                      30,        24,        30,        24,
                                     2007       2006       2007       2006
    Operating Activities:
    Net income                      $1,131      $614      $3,303     $2,470
    Adjustments to reconcile net
     income to net cash provided
     by operating activities:
       Depreciation and amortization   100        82         383        272
       Non-cash portion of share-based
        compensation expense           117       127         488        495
       Incremental tax benefits from
        stock options exercised        (41)      (27)       (240)      (403)
       Net realized gains on
        marketable securities and
        other investments              (49)      (42)       (222)      (136)
       (Gains) losses on derivative
        instruments                     (2)       11          (2)        29
       Other-than-temporary losses on
        marketable securities and
        other investments               16         3          27         24
       Equity in losses (gains) of
        investees                        1        (1)          1         29
       Non-cash income tax expense
        (benefit)                     (274)      139          91        514
       Other items, net                (46)       (6)        (42)       (28)
    Changes in assets and
     liabilities, net of effects
     of acquisitions:
        Accounts receivable, net        46         7         (16)      (133)
        Inventories                    (87)       10        (234)       (71)
        Other assets                    41       (10)        (96)        15
        Trade accounts payable          82       (89)        209         51
        Payroll, benefits and other
         liabilities                    70       116         139         96
        Unearned revenue               (62)       18          22         29
      Net cash provided by operating
       activities                    1,043       952       3,811      3,253
    Investing Activities:
      Capital expenditures            (247)     (129)       (818)      (685)
      Purchases of available-for-sale
       securities                   (2,571)   (2,907)     (8,492)   (12,517)
      Proceeds from sale of
       available-for-sale
       securities                    1,744     2,937       7,998     10,853
      Maturities of held-to-maturity
       securities                        -        60           -        130
      Other investments and
       acquisitions, net of cash
       acquired                        (19)      (17)       (249)      (407)
      Change in collateral held under
       securities lending             (268)        -        (421)         -
      Other items, net                  71        (6)         84          3
      Net cash used by investing
       activities                   (1,290)      (62)     (1,898)    (2,623)
    Financing Activities:
      Proceeds from issuance of
       common stock                     82        69         556        692
      Incremental tax benefits from
       stock options exercised          41        27         240        403
      Repurchase and retirement of
       common stock                 (1,218)     (335)     (1,482)    (1,500)
      Proceeds from put options          -         -          17         11
      Dividends paid                  (230)     (198)       (862)      (698)
      Change in obligation under
       securities lending              268         -         421          -
      Other items, net                  (1)        -          (1)         -
      Net cash used by financing
       activities                   (1,058)     (437)     (1,111)    (1,092)
      Effect of exchange rate
       changes on cash                   -        (1)          2         (1)
    Net (decrease) increase in cash
     and cash equivalents           (1,305)      452         804       (463)
    Cash and cash equivalents at
     beginning of period             3,716     1,155       1,607      2,070
    Cash and cash equivalents at
     end of period                  $2,411    $1,607      $2,411     $1,607
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
+1-858-651-9303, fax, ir@qualcomm.com

Plus de actualités: Qualcomm Incorporated
Plus de actualités: Qualcomm Incorporated