Back to top

Analyst Blog

Qualcomm Inc. (QCOM - Analyst Report) has postponed its second installment of nearly 5 billion yen ($53 million) to be paid to the loss-bearing Japanese TV manufacturer, Sharp Corporation. The installment – expected to be made by the world’s leading chipset maker for mobile handsets by Mar 29 – is now slated for Jun 30. 

In Dec 2012, Qualcomm decided to invest 10 billion yen ($120 million) in two installments. The first 5 billion yen was paid through a private placement of new shares at the end of 2012 and the remaining was scheduled until the production of a new panel. The agreement will also facilitate Qualcomm to build new power-saving screens using Sharp's IGZO technology.

However, Sharp Corporation failed to meet the above condition. This has resulted in a delay in Qualcomm’s second round of installment.

An increased supply of TV sets coupled with stiff competition from other TV manufacturers like Sony Corporation (SNE - Snapshot Report) and Samsung Electronics have hugely affected the Sharp’s business, resulting in continued revenue decline in the last few quarters. Moreover, the company requires nearly $2.1 billion by the end of Sep 2013, to pay off its convertible bond holders.

So, the investment from Qualcomm and the recent sale of a 3.08% stake in Samsung for $112 million will boost Sharp’s cash position to some extent. Moreover, Sharp also plans to sell its Chinese TV assembly plant assets to Lenovo Group Ltd and its Mexican TV factory to Hon Hai, in an attempt to improve its cash flow.

Currently, Qualcomm carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other stocks to consider in the semiconductor industry are Texas Instruments Inc. (TXN - Analyst Report) and Broadcom Corp. (BRCM - Analyst Report). Both these companies have beaten the Zacks Consensus Estimates in the most recent quarter and currently have a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%