Analyst Tim Luke says Q2 results were in line with his estimates. He says he was expecting a moderate deceleration in Q3 and a modest resetting of chipset unit expectations but says management seems to have seen a broad range of handset customers pushing out orders over the last 10 days. He cut the $1.21 fiscal 2001 (Sept.) EPS estimate to $1.05, and cut the $1.45 fiscal 2002 estimate to $1.29.
Luke notes the near-term challenges in handset inventories, and slower acceleration in royalty and licensing sales. He thinks shares may retest the high $40s. However, his more somber near-term outlook could be tempered if Qualcomm is awarded buildout contracts in China using its CDMA digital technology. Luke also adds that the company's fiscal 2002 guidance could be conservative. He kept his strong buy rating.