SAN DIEGO -- January 16, 2001 -- Qualcomm Incorporated (Nasdaq: QCOM) today announced that it is evaluating the effects of Globalstar's announcement that it has suspended indefinitely principal and interest payments on all of its funded debt, including its credit facility, vendor financing agreements and Senior Notes. As of December 31, 2000, Qualcomm had approximately $610 million in net assets related to its business with Globalstar, including receivables, inventory, deferred costs, unearned revenues and investment-related assets.
The Company expects to reserve a significant portion of its Globalstar-related assets and incur a small negative impact to operating earnings in its first fiscal quarter ending December 31, 2000. Despite these effects, the Company remains comfortable with the analyst consensus estimate of $.28 pro forma earnings per share in the first quarter of fiscal 2001. Qualcomm will announce its first quarter fiscal 2001 results on January 25, 2001 at approximately 1:30 pm PST.
"The quality, service and reliability of the Globalstar system has been exceptional since its commercial launch in early 2000. We believe current and new product offerings support an expanding market for Globalstar service and we expect the system to continue to operate into the future," said Dr. Irwin M. Jacobs, chairman and CEO of Qualcomm. "The introduction of higher speed data modules, now in development, should open further data applications and vertical markets for the Globalstar system."
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 business areas include integrated CDMA integrated circuits and system software; technology licensing; Eudora® email software for Windows and Macintosh® computing platforms; digital cinema systems; and satellite-based systems including portions of the Globalstar™ system and wireless fleet management systems, OmniTRACS® and OmniExpress™. Qualcomm owns patents that are essential to all of the CDMA wireless telecommunications standards that have been adopted or proposed for adoption by standards-setting bodies worldwide. Qualcomm has licensed its essential CDMA patent portfolio to more than 90 telecommunications equipment manufacturers worldwide. Headquartered in San Diego, Calif., Qualcomm is included in theS&P500 Index and is a 2000 FORTUNE 500® company traded on The Nasdaq Stock Market® 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 Company's ability to successfully develop high-speed data applications for the Globalstar system on a timely and profitable basis and continued operation of the Globalstar system in light of economic, political and other risks, 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 24, 2000, and most recent Form 10-Q.