QCOM Misses Big Time

Qualcomm misses revenues and earnings and lowers guidance for the rest of 2010. One of the problems they are facing according to the company is that people are choosing cheaper phones. That could be a result of people realizing that they do not really need the expensive iPhones and Blackberrys and the expensive monthly data plans they come with especially in a time when unemployment is very high and rising and people's incomes and buying power -except for goldman- are falling. This is also a sign that the pricing power of Qualcomm will have to decrease over time as has been the case with a lot of technology companies over the last several decades.

Here is a report from AP via Yahoo:
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Qualcomm stock dives on cautious forecast

Qualcomm sounds cautious note on recovery, pulls back on 2010 forecast

By Peter Svensson, AP Technology Writer , On Wednesday January 27, 2010, 4:42 pm

NEW YORK (AP) -- Qualcomm Inc., whose chips and other technologies are used in vast numbers of cell phones, sounded a cautious note on the economy on Wednesday, saying a "subdued" recovery forced it to slightly dial back expectations for 2010.
The company's stock fell 8 percent in extended trading.
A lagging recovery in Europe and Japan and a greater demand for cheap phones prompted the company to reduce its sales estimate for the year, said CEO Paul Jacobs.
Qualcomm had expected sales of $10.5 billion to $11.3 billion for the fiscal year, which ends in September. It's now expecting $10.4 billion to $11 billion. It kept its full-year earnings estimate, at $1.56 per share to $1.76 per share.
However, Qualcomm gave a forecast for the current quarter that came in under the expectations of Wall Street analysts. It expects earnings of 49 cents to 53 cents excluding items, and revenue between $2.4 billion and $2.6 billion. Analysts were expecting earnings of 57 cents per share, excluding items, on revenue of $2.75 billion.
For the just-ended fiscal first quarter, Qualcomm posted net income that more than doubled. But it said much of the increase was due to investment income, as financial markets stabilized.
It posted net income of $841 million, or 50 cents per share, in the quarter that ended Dec. 27. That was up from $341 million, or 20 cents per share, in the same period the year before.
Revenue rose 6 percent from the same period a year earlier to $2.67 billion.
The company says that earnings excluding one-time items were 62 cents per share. Analysts, on average, were expecting a profit of 56 cents per share on sales of $2.7 billion, according to Thomson Reuters.
Shares of Qualcomm, which is based in San Diego, were down $3.95, or 8.4 percent, at $43.29 after the release of the results.
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