Comments from its fiscal second-quarter press release sound very much the same as the prior three quarters -- increased sales of CDMA handsets, strong demand for its chipsets, and raised guidance for future quarters. Another solid $714 million in free cash flow helped the company increase its balance of cash and equivalents to a hefty $6.6 billion.
The company is also seeing emboldened average selling prices (ASPs) for CDMA handsets -- average prices for phones typically drop from one year to the next by 10% or more. But Qualcomm believes 2004 should show ASPs flat from 2003, an indication that consumers are gobbling up its feature-rich, next-generation models with advanced data capabilities.
So far, 2004 has shaped up to be a far better year than Qualcomm ever imagined, with its fiscal 2004 earnings outlook now a full 50% above where management saw it less than six months ago. Similarly, Qualcomm's revenue outlook has zoomed from a 3%-7% year-over-year increase to a 26%-29% increase. And many investors believe the company is still erring on the conservative side with its recent outlook.
Qualcomm's earnings streak tops an impressive season for wireless equipment makers. Ericsson
With the global wireless business back in style, Qualcomm is riding high on strong growth trends. Once a "story stock" that rode the bubble up -- and down -- Qualcomm is proving its mettle and indicating that the best part of its story may still lie ahead.
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It's rumored that Fool contributor Dave Mock once defied air quality standards and drove a car for months that only fired on three of four cylinders. While he does not own shares in Qualcomm, he has written a biography on the company, The Qualcomm Equation. He does own shares of Motorola -- but has not written a book on it.