Qualcomm Inc. (Nasdaq: QCOM) was tumbling ahead of Wednesday's opening bell after it announced that it may experience lower order levels for its chipsets in the fourth quarter.
Based on recent feedback from South Korean customers and operators, the company said it sees a decrease in domestic South Korean phone sales related to the elimination of phone subsidies.
The stock was down to 60 on the Instinet electronic broker system from a Tuesday close of 63-11/16. Shares fell on earlier concerns about the company's business in Korea on June 15, as analysts were mixed on whether the elimination of phone subsidies in South Korea would impact Qualcomm's business.
The wireless company's competitors include Nokia (NYSE: NOK, Ericsson (Nasdaq: ERICY) and Motorola (NYSE: MOT).
Qualcomm said it is evaluating potential offsetting factors, such as the introduction of carrier marketing programs in South Korea, increased exports to other worldwide markets and the deployment of Code Division Multiple Access (CDMA) 1x networks. Two Korean operators plan to commercially launch these third-generation networks in the fourth calendar quarter of 2000.
Qualcomm added that it does not expect these developments in South Korea to affect pro forma earnings in the third quarter of fiscal 2000. Third quarter earnings will be announced on July 19. The company said it expects to have more information on its expectations for the fourth quarter at that time.
First Call is expecting a profit of 27 cents a share for the third quarter, 30 cents for the fourth quarter and $1.08 for the year.