Sell-Off Cuts Down Latest Qualcomm Rally

Wireless technology giant Qualcomm’s latest rally gave way to another sell-off Wednesday, after an analyst at brokerage Bear, Stearns & Co. cut his earnings forecasts for fiscal 2000 and 2001.

San Diego-based Qualcomm (QCOM), which makes cell-phone chips and licenses its wireless technology, slid $10.88 to $70.50 on Nasdaq in heavy trading of 41.9 million shares.

The stock had jumped from $66.06 on May 26 to $81.69 as of Monday, as investors returned to it after its deep slide in recent months. The shares peaked at $200 earlier this year.

On Wednesday, Bear Stearns analyst Wojtek Uzdelewicz estimated that the company’s earnings would be 3 cents or 4 cents a share below the $1.08 he expected it to earn in the year ending in September. He cut his 2001 estimate to $1.30 a share from $1.40.

Uzdelewicz cited concern about slowing sales in Qualcomm’s biggest market, South Korea, where the government recently banned cell- phone discounts.

“There is going to be pressure on the stock for the next few quarters because of earnings uncertainty,” Uzdelewicz said at the Bear Stearns technology conference in New York. But he still rates the stock “attractive.”

Uzdelewicz also cited worries about sales in China and the company’s Globalstar satellite-phone venture.

Qualcomm makes chips based on the code division multiple access standard it developed, and collects royalties on sales of CDMA phones. More than 57 million people worldwide use CDMA phones, with about 26 million of those in South Korea.

Chase H&Q; analyst Ed Snyder, who rates Qualcomm a “market perform,” said the company may warn of lower-than-expected earnings this year if South Korea doesn’t reverse the ban on discounts. That could trigger analysts to downgrade Qualcomm and send the shares tumbling as low as the “high $40s,” Snyder said.