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(QCOM) - Get Qualcomm Inc Report

partying days are in the past, for now.

When the San Diego-based cell-phone company reports fiscal third-quarter results Wednesday, Wall Street will be less interested in its numbers than in how the cellular phone giant sees its next quarter. And the consensus is that Qualcomm's outlook won't be pretty. That marks a stark reversal from a year ago, when Qualcomm was the


hottest stock and dreams of CDMA -- a transmission protocol for mobile communications -- domination danced in investors' heads.

The coming fiscal fourth quarter will mark the first period in which the company will feel the impact of an expected South Korean chip-sales slowdown. Along with the setbacks in China and challenges to its technological dominance that have knocked the stock down some 65% this year, Qualcomm faces some bleak days with little prospect of happy news.

Going South?

Qualcomm, which makes its money on mobile-phone chip sales and technology royalties, depends on South Korea for about a quarter of its chip sales. This summer, the South Korean government moved to ban nationwide price discounts on mobile phones, an action that will damage Qualcomm's profits, says

A.G. Edwards

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analyst David Heger. A.G. Edwards hasn't underwritten for Qualcomm, and it has a "buy aggressive" rating on the stock.

South Korea's decision could mean "a big chunk of Qualcomm's business evaporating before our eyes," says

Chase H&Q

analyst Edward Snyder, whose firm hasn't underwritten for Qualcomm. It rates the stock market perform.

That said, investors shouldn't expect to see real problems in Qualcomm's numbers until the fourth quarter. "Qualcomm's numbers will be fine this quarter," says Snyder, who expects the company to earn 29 cents a share, meeting estimates, and to post third-quarter chip sales of 14.5 million, up from 11 million in the second quarter. Heger, meanwhile, expects Qualcomm to report earnings of 27 cents a share on chip sales of 15.5 million.

Qualcomm shares, which had rebounded more than 20% in recent sessions after a three-month-long slide, slid 4 11/16, or 6.7%, to close Tuesday at 65 1/8.

Watching and Waiting

The fourth-quarter numbers will bear close watching, Heger says. Qualcomm projects fourth-quarter chip sales may slip to 13 million, and Snyder says any figure less than 10 million could beat up the stock. Revenue in the fourth quarter could drop to $693 million from around $745 million in the third quarter, says Greg Teets, another analyst at A.G. Edwards.

Still, Heger points out that this isn't the first time South Korea has taken steps that could hurt Qualcomm. In a previous instance, it reversed its ban only months later.

The analyst also suggests that the impact of South Korea's move is priced into Qualcomm's stock. Further, Heger says he believes the company is successfully combating recent misconceptions about its rights to royalties for the next generation of mobile technology.

"Qualcomm has done a good job of damage control to help clarify the situation and to help rebuild the stock," Heger says.