Skip to content
AnalystLens

QUALCOMM INC/DE Annual Report, Year Ended Sep 24, 2000

Filing Date
Filed November 3, 2000
Period End
September 24, 2000
Security
QCOM
In the record · 2016–202610-K1010-Q338-K138

QCOM filed 10 annual reports (10-K), 33 quarterly reports (10-Q) and 138 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Aug ’17Aug ’17
  2. Leadership change8-K · Aug ’19Aug ’19
  3. Material agreement8-K · Oct ’21Oct ’21
  4. FY2025 annual report10-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 10-K filed November 3, 2000. Cited figures are marked; the original filing is the authoritative source.

QUALCOMM's fiscal 2000 10-K (fiscal year ended September 2000) shows a company in a major transition.

Revenue fell to $3.20 billiona from $3.94 billion, largely because the company sold its terrestrial CDMA consumer phone business to Kyocera (February 2000) and its infrastructure business to Ericsson (May 1999). Profitability improved sharply: net income rose to $670 million from $201 million, helped by a $270 million realized gain on securities and a 47% cost of revenues ratio versus 63% a year earlier. Diluted EPS was $0.85 versus $0.31.

Results were flattered by non-recurring items, including $494 millionb of investment income, and the effective tax rate rose to 44%. The balance sheet strengthened considerably. Stockholders' equity reached $5.5 billion, up from $2.9 billion, mainly from share issuance tied to the $1 billion SnapTrack acquisition and conversion of the trust preferred securities.

Cash and marketable securities totaled $2.5 billionc. Management also disclosed significant risk exposures: about $618 million of net asset exposure to Globalstar, which has defaulted on a bank facility; up to $500 million in planned Pegaso financing; a $200 million Inquam venture commitment; and a $125 million Wingcast contribution. The planned spin-off of the integrated circuit and system software business (QUALCOMM Spinco) is a key strategic event for investors to watch.

Beyond these items, the filing emphasizes the dependence of royalty revenue on CDMA adoption against GSM and TDMA, and on 3G deployment timing (cdma2000 1xd in South Korea and planned U.S. launch in 2001). Customer concentration is high: Samsung, LG and Hyundai made up 39% of QCT revenue, and South Korea accounted for 22% of total revenue. Pending litigation, including the GTE Wireless patent suit and the ETRI arbitration, adds further uncertainty.

02—Key points

Key Highlights

  1. Revenue declined 19% to $3.197 billion (from $3.937 billion), reflecting the divestitures of the consumer phone and infrastructure businesses.
  2. Net income rose to $670.2 million (diluted EPS $0.85) from $200.9 million (diluted EPS $0.31), but included a $270 million realized securities gain and $494 million total investment income.
  3. Cost of revenues fell to 47% of revenue from 63%, reflecting a shift toward high-margin integrated circuits, software and royalties.
  4. Technology Licensing (QTL) revenue rose 55% to $705 million with pre-tax earnings of $633 million, making it the highest-margin segment.
  5. Stockholders' equity grew to $5.52 billion, and cash plus marketable securities reached $2.52 billion, after the $1 billion SnapTrack acquisition and trust preferred conversions.
  6. Planned spin-off of QUALCOMM Spinco (integrated circuits and system software) and a $1 billion-scale SnapTrack deal are key strategic catalysts.
  7. Material exposures include about $618 million of Globalstar-related net assets, a Globalstar default on a guaranteed $250 million facility, and up to $500 million of planned Pegaso financing.

03—Questions

Frequently Asked Questions

  1. Why did revenue decline while net income increased sharply?

    Revenue fell because QUALCOMM sold its terrestrial consumer phone business to Kyocera in February 2000 and its infrastructure business to Ericsson in May 1999. Net income rose because cost of revenues dropped to 47% of sales from 63%, royalty and licensing income grew strongly, and the company recorded a $270 million realized gain on securities. Investors should note that the gain and interest income are non-operating and not recurring.

  2. What are the main risks from the Globalstar relationship?

    QUALCOMM has about $618 million of net asset exposure to Globalstar, including receivables, inventory, deferred costs and investments. Globalstar defaulted on a $250 million bank facility that QUALCOMM partially guaranteed, and QUALCOMM paid $22 million under that guaranty. Globalstar may need additional funding, and its success depends on an uncertain market for low-Earth-orbit satellite service. Globalstar revenue accounted for about 7% of total fiscal 2000 revenue.

  3. How concentrated is QUALCOMM's customer base?

    Concentration is high. Samsung, LG and Hyundai together accounted for 39% of QCT segment revenue, and South Korea represented 22% of total revenue in fiscal 2000. Samsung alone was 11% of consolidated revenue. Losing or delaying orders from these customers, or a South Korean economic downturn, would materially affect results.

  4. What is the planned spin-off of QUALCOMM Spinco, and why does it matter?

    QUALCOMM plans to separate its integrated circuit and system software business (QCT) into a new public company, QUALCOMM Spinco, and distribute its shares to stockholders, expected during fiscal 2001. Dr. Irwin Jacobs would chair both companies. The company says the separation aims to sharpen strategic focus. However, the filing notes that the spin-off is not guaranteed and that conflicts of interest and management disruption could follow.

04—Continue

← View all 10-K filings