Therefore, the income statement does not provide a line item detailing this new way of billing customers. Reading the quarterly earning releases is not enough. If you still don't understand what's happened or feel uneasy, avoid the company. Pro forma numbers are a necessary evil. They are usually not an attempt to mislead investors but just the same, they can be used to show a company in its best light.
Net income has more figures excluded from it than included .
Now, don't get me wrong. I understand the need to separate out some of the onetime charges and losses. Pro forma numbers do serve a purpose. Pro forma numbers are also handy when a company has sold or acquired businesses recently, as is the case with Qualcomm. It sold several major business units over the last few years, rendering the GAAP financials useless in evaluating the growth of its remaining businesses.