SAN DIEGO -- Sept. 14, 1999 -- Qualcomm Incorporated (Nasdaq: QCOM) today announced that demand for its Code Division Multiple Access (CDMA) chipsets and phones in the fourth fiscal quarter is stronger than that of the third fiscal quarter ended June 27, 1999. Actual royalty reports received to date from the Company's licensees for the third fiscal quarter exceed the corresponding royalty accruals included in the second fiscal quarter. Based on current performance in each of its business units, the Company expects that fourth fiscal quarter earnings from operations will meet or exceed analyst consensus estimates of $.87 per share.
Qualcomm is considering several strategic options for its terrestrial-based phone business that currently holds an industry leading position in CDMA handsets. With increased competition, parts shortages and industry consolidation reducing margins in consumer products, Qualcomm desires to transition the business to a manufacturer that will support its customer base and employees while providing economies of scale, a strong purchasing base and other operating efficiencies. Discussions are underway with a number of companies that have expressed interest.
Qualcomm has set an objective of completing discussions and entering an agreement before the end of the calendar year.
In the meantime, Qualcomm is reducing expenses and taking further steps to improve margins. This may result in a non-recurring charge to earnings. Qualcomm is also reassigning personnel from Qualcomm Consumer Products to Qualcomm CDMA Technologies (Applications Specific Integrated Circuits) to support its rapidly expanding business and to wireless data activities.
"In just under four years, we have built a leading organization that has helped create an industry. Now is the time for Qualcomm to build on these strengths and to again respond to industry needs with new innovations such as wireless data products and applications," said Dr. Paul E. Jacobs, president of Qualcomm Consumer Products. "We will continue to support our customers and employees through an orderly transition."
Qualcomm Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative digital wireless communications products and services based on the Company's CDMA digital technology. The Company's major business areas include CDMA phones; integrated CDMA chipsets and system software; technology licensing; and satellite-based systems including OmniTRACS® and portions of the Globalstar™ system. Headquartered in San Diego, Calif., Qualcomm is included in theS&PIndex and is a 1999 FORTUNE 500® company traded on the Nasdaq under the ticker symbol QCOM.
Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including the risk that unexpected developments will cause fourth quarter earnings to end up below analyst consensus estimates, the risk that the Company will not be successful in entering an agreement with respect to its terrestrial-based phone business by the end of calendar year 1999 or if at all, continued strong demand for CDMA phones and chipsets and growth in CDMA subscribers and systems, the ability of the Company's licensees to sell CDMA products, the Company's ability to successfully manufacture and ship significant quantities of CDMA phones and or other equipment on a timely and profitable basis, and those related to changes in economic conditions of the various markets the Company serves, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 27, 1998, and most recent Form 10-Q.
Qualcomm and OmniTRACS are registered trademarks of Qualcomm Incorporated. Globalstar is a trademark of Loral Qualcomm Satellite Services, Incorporated. All other trademarks are the property of their respective owners.
SOURCE Qualcomm Incorporated
September 14, 1999September 14, 1999