Qualcomm’s (QCOM, Nasdaq) overall Quadrix score of 61 reflects below-average scores for Value, Earnings Estimates, and Performance — all languishing in the low 40s. But Wall Street profit estimates have stabilized recently, and the stock has rallied nearly 16% since Qualcomm posted solid September-quarter results. The company’s outlook will be tied to the performance of smartbooks—new, hybrid gadgets that combine features of smartphones and netbooks. Smartbooks have larger screens and keyboards than traditional mobile phones. Their batteries last longer than those of netbooks, and they receive continuous online access through 3G phone networks. Several versions em- ploy Qualcomm’s Snapdragon processor, which is important for Qualcomm considering it has thus far failed to take a significant share of the netbook market. Wall Street expects Qualcomm’s earnings growth to get back on track, with per-share profits projected to climb 81% in the December quarter and 13% in the year ending September. The consensus projects profits will grow at an annualized rate of 17% over the next five years. Qualcomm will report December-quarter results on Jan. 27. For now, Qualcomm remains a Long-Term Buy.
Richard J. Moroney, CFA
