Update Qualcomm (QCOM)

Talk is just talk. Even, or maybe that’s “especially,” when it’s from a company’s CEO.

But it can still give investors a sense of where a company thinks it’s headed.

Take, for example, the talk from Qualcomm (QCOM) CEO Paul Jacobs in Hong Kong on November 18.

Jacobs told reporters that Qualcomm hopes to sell a fourth-generation chip based on the TD-LTE standard, China’s home growth cell-phone technology in China in 2010. Read more

Update Qualcomm (QCOM)

On November 4 Qualcomm (QCOM) reported mildly disquieting news.

 Oh, earnings for the company’s fiscal fourth quarter that ended in September were okay. At 48 cents a share they met Wall Street projections. Revenue came in about $4 million light but on total revenue of $2.68 billion I don’t find that especially significant.

 I’m not even deeply concerned by the downward guidance for earnings and revenue for the next quart, the first fiscal quarter for 2010. The company’s estimate of earnings per share of $2.10 to 2.30, versus the Wall Street consensus of $2.32 falls in the usual ballpark for management trying to low ball a projection so they can beat it. (Although I think that Qualcomm is actually feeling the pressure from cell phone manufacturers especially in Korea that ordered too many chips and I am disappointed by the lower guidance for the December quarter since I was expecting acceleration in sales during that period.)

What concerns me most is the continued erosion of Qualcomm’s revenue stream from royalties. Read more

Tech stocks to lead earnings season again?

It’s early yet in earnings season, but I were a gambling man, I’d give the technology sector odds on leading the stock market again this quarter.

Wall Street is beating the bushes for earnings growth right now. If earnings don’t go up in the next quarter or two, stocks won’t be able to continue the rally that began in March.

Anbd where’s the growth going to come from? Financials are kind of iffy. Bank accounting is going to be an unprdictable mess this quarter what with write ups for rallies in toxic assets, and write downs for the rising price of banks’ own debt (yes, that counts as a loss for accounting purposes), commercial real estate loans and credit card debt.

Commodities and materials stocks will do well if the dollar keeps stumbling and if China looks like its still buying, but these cyclicals are starting to seem pricy.

Nope, for good ol’ fashioned earnings power right now, it’s hard to beat technology stocks.

And Wall Street analysts are determined that investors won’t forget it.

On Friday, October 9, Barclays upgraded IBM (IBM) as part of an upgrade of the whole computer hardwar sector. IBM climbed almost 3% on the day and Hewlet-Packard (HPQ) moved up 2%. Inel (INTC) and fellow chip-maker Texas Instruments (TXN) rose 1.5% and 5%, respectively.

Even Qualcomm (QCOM), which has lagged the sector,climbed 0.6%.

Credit Suisse boosted its target price for Google (GOOG) and that stock inched ahead 0.4%. Maybe it’s harder to move a $500 a share stock or maybe investors rightly see Google as company driven by consumer spending and advertising and they still have doubts about the consumer’s willingness to spend.

(Full disclosure: I own shares of Qualcomm.

The recovery isn’t yet a sure thing

In my 11:45 post today, “Huh? Wall Street thinks higher unemployment is good news?” I said that I was still not convinced that the economic recession was truly over. The recovery that we’ve seen signs of in the last few months could simply be inventory restocking. That’s when companies that have put off reordering for months and months because sales were so slow finally decide to restock.

But, and this is what’s critical, these companies aren’t planning on reordering in anything like normal volumes anytime soon, because their customers still aren’t buying much.

It’s tough, I mean really tough, to tell the difference between recovery and restocking. And I’ve seen signs recently of both.

But there are more signs than Wall Street wants to admit that the recovery of the last few months has been caused by inventory restocking rather than by a true upswing in end demand.

That worries me because it sets stocks up for a disappointment. Read more

Update Qualcom QCOM: Only the momentum traders are disappointed

Qualcomm (QCOM) reported better results than Wall Street expected after the market close on July 22. The company’s earnings for its fiscal third quarter came in 2 cents a share above projections.

The stock retreated in trading on July 23, however, because momentum traders who had pushed the stock up in the days before the report didn’t raise guidance for the fourth quarter. With all the good news in the stock for the moment, they sold.

If you’ve got a slightly longer holding period than these traders, though, there was plenty in the report  and conference call to keep you in the stock Read more