SAN DIEGO -- September 15, 2003 -- Qualcomm Incorporated (Nasdaq: QCOM) today updated its financial guidance for its fourth fiscal quarter ending September 28, 2003.
The following statements are forward-looking and actual results may differ materially. Please see description of certain risk factors in this release and Qualcomm's quarterly reports on file with the Securities and Exchange Commission (SEC) for a more complete description of risks.
Fourth Quarter and Fiscal 2003
On July 23, 2003, we estimated fourth fiscal quarter revenues excluding the QSI segment to increase approximately 2-6 percent year-over-year. We had anticipated fourth fiscal quarter earnings per share to be $0.27-$0.29. For fiscal 2003, we had anticipated revenues to increase 31-33 percent year-over-year and earnings per share of $1.40-$1.42, up 43-45 percent year-over-year. These estimates were based on the shipment of approximately 19-21 million MSM phone chips in the fourth fiscal quarter.
Based on the current business outlook, we now anticipate that revenue and earnings per share for the fourth fiscal quarter and fiscal 2003 will achieve the high end of our prior guidance. We now expect to ship approximately 20 million MSM phone chips in the fourth fiscal quarter. Royalty reports from our licensees, received in this September quarter for CDMA products sold in the quarter ended June 30, 2003, indicate sales of approximately 23 million new CDMA subscriber units compared to our estimate of 25 million units for that quarter. The average reported price of new CDMA subscriber units increased sequentially in the June quarter.
"We're approaching the end of a strong growth year for CDMA and Qualcomm," said Dr. Irwin Mark Jacobs, chairman and CEO of Qualcomm. "Steady progress in the deployment and use of 3G CDMA networks is continuing around the world. Customer demand for our MSM phone chips to support these networks leads us to expect a sequential increase in the number of MSM phone chips shipped in the coming December quarter."
On July 23, 2003, we estimated total Qualcomm revenues for the fourth fiscal quarter to increase 2-6 percent year-over-year and total Qualcomm earnings per share of $0.19-$0.21, including an estimated $0.08 loss per share attributed to the QSI segment, compared to $0.23 per share in the year ago quarter. For fiscal 2003, total Qualcomm revenues were anticipated to increase 30-31 percent year-over-year with total Qualcomm earnings per share in the range of $0.84-$0.86, up 91-95 percent year-over-year, including an estimated $0.56 loss per share attributed to the QSI segment. Based on the current business outlook, we now expect total revenues and total earnings will achieve the high end of our prior guidance. Due to their nature, certain income and expense items such as realized gains or losses, gains or losses on derivatives, income related to the use of our FCC Auction Discount Voucher and asset impairments cannot be accurately forecast. Accordingly, the Company excludes 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.
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. Headquartered in San Diego, California, Qualcomm is included in theS&P500 Index and is a 2003 FORTUNE 500® company traded on The Nasdaq Stock Market® under the ticker symbol QCOM.
Note Regarding Use of Non-GAAP Financial Measures
The Company presents financial information excluding the Qualcomm Strategic Initiatives (QSI) segment to facilitate evaluation by management, investors and analysts of its ongoing core operating businesses, including Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL) and Qualcomm Wireless&Internet (QWI). QSI results relate to strategic investments for which the Company has exit strategies of varying durations. Management believes that the information excluding QSI presents a more representative measure of the operating and liquidity performance of the Company because it excludes the effect of fluctuations in the value of investments that are unrelated to the Company's operational performance. The financial information excluding QSI should be considered in addition, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Reconciliations between total Qualcomm results and results excluding QSI are presented on the Company's web site at http://www.qualcomm.com.
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: changing global economic conditions, particularly in the telecommunications and Internet-related industries and the resulting uncertainty in forecasting future results; timing and receipt of license fees and royalties; integrated circuit inventory and order levels; the Company's ability to execute additional 3G licenses; the scale-up, acceptance and operations of CDMA systems, including CDMA2000 1xEV-DO and systems in new markets such as China and India; the ability to sustain or improve operational efficiency and profitability; decreases in the rate of growth in CDMA-based wireless data and Internet access or the CDMA subscriber population; strategic investments, loans, acquisitions or divestitures the Company has or may pursue; the value realized on sale of the Vesper Companies' business or assets; changes in the fair values of marketable securities and derivative instruments held; the development, deployment and commercial acceptance of evolving CDMA technology standards; developments in current or future litigation; customer receivables and performance guarantees; component shortages; and international business activities, as well as the other risks detailed from time-to-time in the Company's SEC reports.