Qualcomm won a rare legal victory late Wednesday, as the U.S. Court of Appeals for the Federal Circuit granted a stay pending appeal that will allow third parties to import handsets into the U.S. originally banned by the International Trade Commission. The ITC imposed the ban in early June after finding Qualcomm had infringed on a patent held by Broadcom (full story). In a statement, Qualcomm said it is pleased with the decision and "will continue to pursue the appeal of the ITC's order with the Federal Circuit and seek a reversal of the underlying infringement finding." Mobile device makers and wireless carriers also benefit from the decision. UBS analysts published a research report following the court's decision, saying they maintain their "buy" rating with a 12-month price target of $54/share. A Thomas Weisel analyst commented, "Given that the stock is currently discounting a worst case scenario and trading at historically low multiples relative to the company's strong business fundamentals, we believe the stock offers upside." Shares of Qualcomm rose 3.4% to $39.17 on Thursday, gaining as much as 4.6% intra-day. Broadcom was up 1.4% to $35.87.
Sources: Press release, Bloomberg, MarketWatch, newratings.com
Commentary: Qualcomm Loses Again • Nokia Seeks to Block U.S. Import of Qualcomm Chips • Should You Buy Qualcomm On Bad News?
Stocks/ETFs to watch: QCOM, BRCM, NOK. ETFs: BDH, WMH, IGN
Earnings call transcript: QUALCOMM F3Q07, Broadcom Q2 2007
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