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Qualcomm Announces Fourth Quarter and Fiscal 2007 Results Fiscal 2007 Revenues $8.87 Billion, Diluted EPS $1.95 Pro Forma Fiscal 2007 Revenues $8.87 Billion, Diluted EPS $2.01
Worldwide 3G Adoption Drives Record Fiscal Year Financial Results
Qualcomm Incorporated (NASDAQ:QCOM) announced results for the fourth fiscal quarter and year ended September 30, 2007.
Total Qualcomm (GAAP) Results
Total Qualcomm results are reported in accordance with generally accepted accounting principles (GAAP).

  Fourth Quarter
  -- Revenues:  $2.31 billion, up 15 percent year-over-year and down
     1 percent sequentially.
  -- Net income:  $1.13 billion, up 84 percent year-over-year and 42 percent
     sequentially.
  -- Diluted earnings per share:  $0.67, up 86 percent year-over-year and
     43 percent sequentially.
  -- Effective tax rate:  negative 19 percent, due to a $331 million benefit
     as a result of completing audits of prior years' tax returns.
  -- Estimated share-based compensation:  $78 million, net of tax, up
     3 percent year-over-year and 3 percent sequentially.
  -- Operating cash flow:  $1.04 billion, up 10 percent year-over-year;
     45 percent of revenues.
  -- Return of capital to stockholders:  $1.45 billion in the fourth
     quarter, including $230 million of cash dividends, or $0.14 per share,
     and $1.22 billion to repurchase 31 million shares of our common stock.


  Fiscal 2007
  -- Revenues:  $8.87 billion, up 18 percent year-over-year.
  -- Net income:  $3.30 billion, up 34 percent year-over-year.
  -- Diluted earnings per share:  $1.95, up 35 percent year-over-year.
  -- Effective tax rate:  9 percent.
  -- Estimated share-based compensation:  $324 million, net of tax, up
     1 percent year-over-year.
  -- Operating cash flow:  $3.81 billion, up 17 percent year-over-year;
     43 percent of revenues.
  -- Return of capital to stockholders:  $2.34 billion, including
     $862 million of cash dividends, or $0.52 per share, and $1.48 billion
     to repurchase 37 million shares of our common stock.

Qualcomm Pro Forma Results
Pro forma results exclude the Qualcomm Strategic Initiatives (QSI) segment, certain estimated share-based compensation, certain tax items related to prior years and acquired in-process research and development (R&D) expense.

  Fourth Quarter
  -- Revenues:  $2.31 billion, up 15 percent year-over-year and down
     1 percent sequentially.
  -- Net income:  $911 million, up 29 percent year-over-year and down
     2 percent sequentially.
  -- Diluted earnings per share:  $0.54, up 29 percent year-over-year and
     down 2 percent sequentially; excludes $0.02 loss per share attributable
     to the QSI segment, $0.05 loss per share attributable to certain
     estimated share-based compensation and $0.20 earnings per share
     attributable to certain tax items related to prior years.
  -- Effective tax rate:  19 percent.
  -- Free cash flow:  $916 million, up 1 percent year-over-year; 40 percent
     of revenues.  (Defined as net cash from operating activities less
     capital expenditures).


  Fiscal 2007
  -- Revenues:  $8.87 billion, up 18 percent year-over-year.
  -- Net income:  $3.41 billion, up 21 percent year-over-year.
  -- Diluted earnings per share:  $2.01, up 23 percent year-over-year;
     excludes $0.08 loss per share attributable to the QSI segment, $0.19
     loss per share attributable to certain share-based compensation, $0.22
     earnings per share attributable to certain tax items related to prior
     years and $0.01 loss per share attributable to acquired in-process R&D.
  -- Effective tax rate:  22 percent.
  -- Free cash flow:  $3.53 billion, up 11 percent year-over-year; 40
     percent of revenues.  (Defined as net cash from operating activities
     less capital expenditures).

Detailed reconciliations between total Qualcomm (GAAP) results and cash flow and Qualcomm pro forma results and cash flow are included at the end of this news release. Prior period reconciliations are presented on our Investor Relations web page at http://www.qualcomm.com/.
"We delivered another record performance in fiscal 2007 because our employees and partners continue to provide industry leading innovative wireless products and services," said Dr. Paul E. Jacobs, chief executive officer of Qualcomm. "We achieved record revenues, net income and operating cash flow and returned a record $2.3 billion of capital to our stockholders through our cash dividend and stock repurchase programs."
"In addition to our strong business and financial performance, our focused execution resulted in many significant achievements in fiscal 2007. More than 530 million wireless subscribers are now benefiting from the widespread and accelerating availability of 3G CDMA mobile broadband networks with advanced wireless devices at competitive prices. We shipped a record 253 million Mobile Station Modem(TM) (MSM(TM)) chips, a 22% year-over-year increase, and for the second quarter in a row we were named the world's top supplier of semiconductors for wireless applications by iSuppli. We continued to expand our chipset portfolio with the addition of the 7000 series platform for high performance wireless devices and a low cost single chip for EV-DO Rev. A mobile broadband."
"In close partnership with the world's leading content providers, our MediaFLO(TM) mobile TV service is now commercially available in the United States and in trials around the world. With ground breaking innovations, such as MediaFLO, Snapdragon(TM) and Gobi(TM), and by partnering with new market entrants, such as Google and Skype, Qualcomm is expanding the impact of 3G CDMA beyond traditional products, services and partners."
Business Outlook
The following statements are forward-looking and actual results may differ materially. The "Note Regarding Forward-Looking Statements" at the end of this news release provides a description of certain risks that we face, and our annual and quarterly reports on file with the Securities and Exchange Commission (SEC) provide a more complete description of risks. Due to their nature, certain income and expense items, such as realized investment gains or losses, gains and losses on certain derivative instruments or asset impairments, cannot be accurately forecast. Accordingly, we exclude forecasts of such items from our business outlook, and actual results may vary materially from the business outlook if we incur any such income or expense items. In addition, our outlook does not include provisions for the consequences of injunctions or significant possible damages or costs related to litigation matters unless damages have been awarded by a court.
We are engaged in multiple disputes with Nokia Corp., including arbitration over Nokia's obligation to pay royalties for the use of certain of our patents. As a result, under generally accepted accounting principles, we are not recording royalty revenue attributable to Nokia's sales after April 9, 2007 until an arbitrator (or court) awards damages or the disputes are otherwise resolved by agreement with Nokia. We have excluded from our fiscal 2008 revenue and earnings guidance our estimate of royalties which we believe Nokia is required to report and pay to us under our existing license agreement in fiscal 2008 of approximately $0.25-$0.30 diluted earnings per share.
We perform periodic audits of the royalties payable by our licensees. As a result of our audit process, we determined during the fourth quarter of fiscal 2007 that total CDMA-based handset unit shipments and average selling prices (ASPs) should be adjusted for certain periods. The adjustments related only to handset shipments and ASPs and did not impact the amount or timing of our revenue. Based on this new information, we now estimate shipments of 89 million handsets reported in our fourth quarter fiscal 2007, compared to our previous estimate of 92 million handsets. The estimated ASP for such units remains unchanged from our prior guidance of $218.
For more information, visit http://investor.qualcomm.com