Qualcomm (NASDAQ: QCOM), which competes with Texas Instruments (NYSE: TXN), reported Q1 numbers after the bell on Wednesday. The data continue to show that all is not well with the world.

Demand for Qualcomm's products is down, and as far as management is concerned, earnings visibility just isn't in the cards due to the financial mess and its effect on the company's marketable securities. Talk about not inspiring confidence.

For the first quarter, Qualcomm delivered pro forma earnings per share of $0.31. That represented an ugly drop of 40% on a year-over-year basis. Revenues inched up 3% to $2.5 billion. The top line beat expectations, but the bottom line didn't come anywhere close as Wall Street was counting on $0.47 per share. Then again, what did any of us expect? It's tough out there in the world.

Qualcomm, Inc. (NASDAQ: QCOM), a famous name in the wireless industry whose colleagues include Broadcom Corporation (NASDAQ: BRCM), Texas Instruments Incorporated (NYSE: TXN), and Nokia Corporation (NYSE: NOK), reported earnings for the fourth quarter on Thursday. While the stock may be up today, I'm not so sure I'd be a buyer of it.

It's not that the bottom-line numbers were wholly bad. Net profit rose 16% to roughly $1.1 billion. Earnings per diluted share on an adjusted basis increased 17% to $0.63. According this news source, that figure beat estimates by three pennies. That's all well and good, but that news source also states that Qualcomm is guiding below consensus. Not surprising, certainly, given what the markets are going through. But it still puts a damper on the stock's near-term potential, in my opinion. Plus, free cash flow was down 13% during the quarter, and it was flat for the twelve-month period.

Except for certain companies like Microsoft Corporation (NASDAQ: MSFT), I'm not really interested in playing the tech sector. If you had purchased Qualcomm near its 52-week low of $30.87, I'd be a seller into today's strength. No, I certainly can't predict the movement of stock prices, but I can tell you that I think Qualcomm could easily pull back from today's rally. The recession is going to worsen, and I don't think we've reached the point where the market will begin to discount better days. In fact, we're probably far off from that point. The rally that is going on in the markets as I write this (and by the time this gets published, it could be gone for all I know) feels like a dead-cat bounce. That wouldn't be good for Qualcomm's stock, I'd imagine. So, kudos to management for beating Q4 expectations. But I won't be rewarding you by buying your stock. Sorry!

Disclosure: I don't own any company mentioned; positions can change at any time.

Qualcomm (NASDAQ: QCOM) is recently down $1.55 to $37.85 in pre-open trading.

US District Judge Selna issued a ruling favorable for Broadcom (NASDAQ: BRCM), prohibiting QCOM from selling W-CDMA and CDMA chips in the U.S.

Cowen says: "We continue to recommend shares of QCOM and see the stock appreciating 20% versus the market over the next year."

QCOM overall option implied volatility of 36 is near its 26-week average according to Track Data, suggesting non-directional risk.

Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

The news hasn't been good for Qualcomm Inc. (NASDAQ: QCOM) lately in its myriad lawsuits with Broadcom. Its most recent setback occurred in Santa Ana, California as the San Diego company lost a dispute with Broadcom Corp. (NASDAQ: BRCM) over three patents that Qualcomm has now been declared as willfully infringing. The news came on the heels of an expected ITC resolution (that was again delayed, this time to June 7) on whether to ban phones containing Qualcomm's chipsets that have been determined to violate another Broadcom patent.

This most recent case centered around five patents that Broadcom acquired and then asserted against Qualcomm. By the end of the litigation phase, Qualcomm was found to infringe upon three patents broadly covering topics of video encoding, network management, and hierarchical networks. Broadcom was awarded $19.6 million in damages, but this value could be tripled as the infringement was determined to be willful.

With no compromise yet reached on a licensing deal to cover the extent of products that Broadcom sells, the company has been methodically attacking Qualcomm's intellectual property base. Both Broadcom and top handset supplier Nokia Corp. (NYSE: NOK) hope to demonstrate legally and in the court of public opinion that they deserve more equal footing with Qualcomm in terms of intellectual property, and should not have to pay significant royalties to Qualcomm.

With the additional leverage, though minor, that Broadcom is achieving through court victories, I wonder at what point it makes sense for Qualcomm to buy Broadcom outright, or conclude some sort of merger. While there may be obstacles or egos in the way, I think Broadcom would be a good compliment to Qualcomm's strategy of becoming more than just a kingpin in the cellular and CDMA markets. Both companies are organized around an elite engineering core with proportionally more advanced degrees in their ranks than many other tech companies, aligning their core R&D centers.

Should the two companies take off their gloves and come to terms of even a strategic partnership, it will go a long way towards helping Qualcomm fend off Nokia and the rest of the industry that wants to dismantle Qualcomm's business and limit its influence in the lucrative wireless markets.

Dave Mock is author of The QUALCOMM Equation and an analyst with Pacific Ridge Capital.

Sprint Nextel Corporation (NYSE:S) is known for being an innovative wireless company that has had many firsts and close-firsts in the mobile phone carrier game. Mobile TV, 3G data networks, wireless online music stores and other features have -- in the past -- set Sprint Nextel apart from competitors like Verizon Wireless and Alltel -- both of which use the same wireless network standard as Sprint Nextel known as CDMA.

But, as Verizon Wireless and larger competitor Cingular Wireless are adding over a million new subscribers per quarter, Sprint Nextel actually lost over 300,000 subscribers in its latest quarter. How could this be?

The carrier blamed the loss on its older iDEN network that still contains customers from the older Nextel network. Sprint and Nextel merged in mid-2005 in response to mergers from Verizon Wireless and Cingular Wireless. Nextel's radio spectrum holdings were very valuable as well, and were a key factor in the merger.

With former (and current) Nextel subscribers being some of the most loyal in the wireless industry -- from my experience -- I am perplexed over why so many Nextel subscribers have left the carrier in its latest quarter. Has Sprint given up on the Nextel network and has service gone to hell or something? Sprint's Gary Forsee will most likely be shown the door this year unless Sprint finds a way to stem customer defections and actually gain customers.