Qualcomm Misses Profit Forecast for 4th Quarter

Wireless communications firm Qualcomm Inc. reported fourth-quarter earnings below Wall Street estimates, and warned that results would be on the low end of expectations for the current quarter and fiscal year.

The San Diego-based company posted a net loss of $44.5 million, or 6 cents a share for the fiscal fourth quarter ended Sept. 30, compared with net income of $126.3 million, or 17 cents per share, for the same quarter last year.

Revenue for the quarter jumped to $650.8 million, up 6% from $614.7 million for the fourth quarter of fiscal 2000.

Qualcomm said its operations met targets for the quarter and the fiscal year, and attributed the disappointing net results to an accounting change and a snag in the sale of Pegaso, a mobile phone carrier in Mexico that has outstanding debt owed to Qualcomm.

Because of the delayed resolution of Pegaso’s future, Qualcomm said it did not book accrued interest on the Pegaso debt in the fourth quarter.

The accounting change also lowered Qualcomm’s net income for the quarter because it requires the company to spread upfront patent and technology licensing fees over five to seven years instead of booking the income in full at the start of the agreement.

Qualcomm’ s so-called pro forma results, which excludes one-time items such as the accounting change, included net income of $162.7 million in the quarter, or 20 cents per share. Wall Street analysts had expected pro forma net income between 24 cents and 26 cents per share.

In a conference call with analysts, Qualcomm executives painted a relatively upbeat picture, with Chief Financial Officer Anthony Thornley declaring the performance “good under very difficult economic circumstances.”

Still, the company said it expects pro forma earnings per share to be 21 cents to 23 cents for the current quarter, down from analysts’ earlier estimates of 25 cents to 32 cents a share. Qualcomm said it expects pro forma revenue to grow 5% to 10% over the last quarter, and operating profit to increase 10%.

For fiscal 2002, Qualcomm expects revenue to rebound and grow 15% to 25% over fiscal 2001’s total of $2.7 billion, which was down from fiscal 2000’s total of $3.1 billion.

The company also expects pro forma earnings per share to range from $1.10 to $1.20 in the current fiscal year, based on estimated sales of 85 million to 95 million mobile phones using Qualcomm’s technology.

Shares in Qualcomm fell to $50.20, in after-hours trading on Instinet, after closing at $54.73 in Nasdaq trading.