Qualcomms Q1 Meets Expectations

Wireless technology provider Qualcomm Inc. on Wednesday reported first quarter earnings that were lower than the previous year.

Excluding investments, Qualcomm made 20 cents per share, as opposed to 26 cents per share a year ago.

Pro forma revenues for the San Diego, Calif., company were $659 million as opposed to $717 million for the same year ago period. Net income for the quarter was $160 million, compared to $209 million for the same year ago period.

While earnings met expectations, the company did lower its expectations for all of 2002, warning that it would be four to eight percent growth. In January the company had predicted a five to 15 percent revenue increase.

Officials attributed the decrease in revenue to fewer shipments of cell phone chips and lower revenues from its business with satellite phone service provider Globalstar.

The company said it had lowered its guidance for the year because the Korean government has banned handset subsidies by wireless operators. As a result, cell phone sales are likely to decline in Korea, which runs its networks on CDMA (Code Division Multiple Access).

Qualcomm owns virtually all of the patents for CDMA technology. CDMAs main competitor is GSM, the Global System for Mobile Communications. Both systems operate in the U.S., and both have upgrade paths to next-generation networks. Qualcomm is depending on the uptake of next generation iterations of CDMA. Qualcomm also invented BREW (binary runtime environment for wireless), an application platform that competes against technologies such as Java.

“We expect further positive momentum as additional 3G CDMA networks are deployed with a variety of color-screen handsets, many utilizing multimedia and position location capabilities as well as exciting new BREW-enabled applications,” said Irwin Jacobs, chairman and CEO of Qualcomm.