Wireless-technology developer and fables-semiconductor supplier Qualcomm (NASDAQ:QCOM) will ring up another quarter of results on Wednesday. What do we expect to hear? Read on:

What analysts say:  

  • Buy, sell, or waffle? Of the 29 analysts weighing in on Qualcomm, 24 have a buy rating, four give the stock a hold, and one analyst says sell. Qualcomm is also a four-star stock (out of a possible five) in the Motley Fool CAPS community based upon the opinions of 792 particiapants.
  • Revenues. On average, analysts predict 16% quarterly sales growth to $2.26 billion.
  • Earnings. Profits are predicted to rise 21% to $0.51 per share.

What management says:
Despite challenges in negotiating licenses with competitors Nokia (NYSE:NOK) and Broadcom (NASDAQ:BRCM), Qualcomm's fundamental business of technology sales has been thriving. The company again bumped up guidance for the coming quarter, citing "stronger than expected chipset demand across our product portfolio and higher CDMA2000 handset shipments ...," those that Qualcomm earns royalties on.

The positive market conditions also gave Qualcomm's board confidence to boost its share buyback program to $3 billion and increase its dividend from $0.12 to $0.14 per share.

What management does:
Expenses have been increasing at Qualcomm -- particularly those for legal defense and bad debt -- at a significant clip, though, hurting margins. The company has also been spending heavily on its new MediaFLO solution, which Verizon (NYSE:VZ) and AT&T (NYSE:T) are using to provide mobile television services to their subscribers.

Margins %

  12/05

 3/05

 6/06

  9/06

 12/06

3/07

Gross

  71.2

 71.3

 71.3

  71.0

  70.5

70.5

Operating

  39.8

 38.4

 37.3

  35.6

  33.8

33.3

Net

  37.4

 35.6

 33.8

  32.8

  32.0

32.1
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
The increased sales of wireless products helped Qualcomm boost margins in the past quarter, and signs point to continued strength in the cell phone market -- even including Motorola's (NYSE:MOT) tale of woe. The company also tends to be conservative in its estimates, so investors could see margins tick up again this quarter, or at least see some of the declines because of expenses could be somewhat offset.

But detail in the larger picture still looms -- Qualcomm continues to struggle with major licensee Nokia and a product ban thanks to the U.S. International Trade Commission (ITC). Broadcom recently signed a license with Verizon to allow the company to circumvent the ban, which Qualcomm actually sees as "a positive development." With a Broadcom settlement unlikely anytime soon, Qualcomm is still pinning hopes on having the ITC ban vetoed. And with these major issues still outstanding, near term fundamentals will likely give way to news on the legal front for the time being.

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Fool contributor Dave Mock goes with the flow and rolls with the times. He owns shares of Qualcomm and Motorola. Dave is the author of The Qualcomm Equation. The Fool's disclosure policy goes down easy, with no upset stomach or noxious side effects.