Qualcomm gazes at its navel while stroking the surgeon’s saw

According to a recent report published in The Wall Street Journal (WSJ), Qualcomm will soon carry out a “sweeping strategic review” wherein the company will also ponder the possibility of the split between its business among other options.

Qualcomm has not commented on the matter although its spokesperson referred to an April statement when it reported a 46 percent drop in Q2 profit and CEO Steve Mollenkopf said the company, unhappy with its financial outlook, would undertake a comprehensive review of its cost structure.

Jana Partners, an $11 billion New York-based hedge fund, has signaled its desire to change things up at Qualcomm ever since it acquired a $2 billion stake in the chipmaker earlier this year.

The report indicated that any breakup of the company would likely separate Qualcomm’s chip-production business from its patent-licensing operation.

Separately, TheStreet Ratings team rates QUALCOMM INC as a Buy with a ratings score of B-.

“Prior reviews have concluded that the synergies provided by our business model create more value for stockholders than could be created through alternative corporate structures”, Qualcomm said in response to the news back in April. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover.

The chipmaker is expected to announce the job cuts when it releases its quarterly results on Wednesday, the tech website reported, citing people inside and outside of the company. According to both sites, the company may be announcing the drastic measure tomorrow, July 22nd, during its second-quarter earnings call. MediaTek’s senior vice president, Jeffrey Ju, told me at the company’s Hsinchu, Taiwan headquarters that it expects its modems will be competitive with Qualcomm’s in a year. The move comes following disappointing first-quarter earnings numbers. “You have to remember that Qualcomm does have a very large buyback program going on right now and given that we feel the shares are undervalued, we’re fine with that”.

That article has been picked up this morning by wire services suggesting Qualcomm may consider a breakup.