This summary is based on the third quarter fiscal 2008 earnings call conducted by Qualcomm Inc. (QCOM) on July 23, 2008.
Management:
President: Steven Altman
CEO: Paul Jacobs
EVP and CFO: Bill Keitel
COO: Sanjay Jha
VP, Investor and Industry Analyst Relations: John Gilbert
Key Investor Issues:
- The Q3 revenues increased 6% sequentially to $2.8 billion.
- The GAAP EPS were 45 cents, a decrease of 4% year-over-year and sequentially.
- The company paid $261 million in Q3 dividends or 16 cents dividend per share.
Third-Quarter Financial Highlights:
The management advised that the pro forma Q3 results exclude the Qualcomm Strategic Initiatives (QSI) segment.
- The results also exclude certain estimated share-based compensation, certain tax items related to prior years and acquired in-process R&D expense.
The pro forma diluted EPS were 55 cents for the quarter.
- This represents a 2% sequential increase.
- The EPS excludes 4 cents loss per share attributable to the QSI segment, 6 cents loss per share attributable to certain estimated share-based compensation and 1 cent loss per share attributable to acquired in-process R&D.
The company reported a pro forma Q3 tax rate of 18%.
- The management expects fiscal 2008 tax rate to be about 19%.
- The free cash flows were $844 million, a decrease of 14% on a year-on-year basis.
- The free cash flows constitute 31% of revenues.
The management reached a settlement agreement with Nokia.
- The agreement resolves all litigation between the companies and will allow both parties to focus efforts on driving the global 3G and 4G markets forward.
- The company will provide an upfront royalty payment and other benefits.
- The management reported that the company will also receive on-going royalties for all CMDA standards, as well as single mode OFDMA.
- Nokia is also withdrawing its complaint to the European Commission.
- The company continues to be engaged in litigation with Broadcom Corporation in various forms.
The company’s cash, cash equivalents and marketable securities totaled $11.2 billion at the end of the third quarter.
- This compares with $10.6 billion at the end of the second quarter 2008 and $12.3 billion in the year ago quarter.
- On July 16, 2008, the management announced a cash dividend of 16 cents per share payable on September 26, 2008 to stockholders of record at the close of business on August 29, 2008.
The company’s GAAP net income for the quarter included estimated share-based compensation, net of tax, of $94 million or 6 cents per share.
- This compares with $76 million or 4 cents per share in the prior year quarter.
