Weekly wireless ratings wrap-up

Following are ratings changes and financial information on wireless companies from financial services and investment banking firms announced this week. Nortel, AAT, UTStarcom, Alvarion, Intrado and others mentioned.

• Standard & Poor’s Ratings Services raised its corporate credit rating on tower company AAT Communications Corp. to BB- from B- and removed the company from CreditWatch where it was placed in April with positive implications. S&P also assigned ratings to the company’s first lien and second lien bank loan facilities with a recovery rating of one. S&P said the company’s outlook is stable.

   

• Pacific Growth Equities cut its third- and fourth-quarter estimates for UTStarcom Inc. due to expected slower non-Chinese sales prospects. The firm said it expects the company to report revenues for the third quarter of $765 million and a loss of 9 cents per share, rather than $780 million and a loss of 8 cents per share as previously estimated. For the fourth quarter, Pacific Growth Equities expects UTStarcom to report revenues of $795 million and a gain of 9 cents per share, rather than revenues of $840 million and a gain of 13 cents per share as previously expected.

   

• Moody’s Investors Service confirmed its ratings on Nortel Networks Ltd. following a ratings review for possible downgrade launched in April. Moody’s assigned a speculative grade liquidity rating of SGL-3 to Nortel, which reflects adequate liquidity to fund debt maturities and other cash outflows over the next year. The outlook on Nortel is negative.

   

• CIBC World Markets released its second-quarter wireless preview, including subscriber growth and handset demand tracking in line to slightly better than expected. The firm said it expects handset shipments to increase 2.2 percent quarter over quarter to 173.8 million, driven by strong growth in the United States and solid growth in Europe. Wireless infrastructure spending remains on track, said CIBC.

   

• Standard & Poor’s Ratings Services lowered its long-term corporate credit and senior unsecured debt ratings on Belgacom SA to A+ from AA- due to the company’s weakening business profile. S&P affirmed its A-1+ short-term corporate credit and debt ratings on the company. Belgacom’s outlook is stable. S&P cited competitive pressure, including pressure on its Proximus mobile interest, as well as limited domestic growth prospects in Belgium.

   

• CIBC revised its estimates on Alvarion following the company’s preannouncement of second-quarter results, which included delayed revenue recognition. New estimates for the quarter are $46.4 million and a loss of 4 cents per share, down from estimates of $56.6 million and earnings of 4 cents per share. For the fiscal-year 2005, CIBC estimates the company will report revenues of $216 million and 4 cents per share, down from estimates of $345 million and 25 cents per share.

   

• Prudential Equity initiated coverage on Solectron with a neutral rating and a price target of $4, citing potential opportunities next year tempered by delays in several project ramp-ups.

   

• Pacific Growth Equities downgraded its rating on Intrado Inc. to equal weight from over weight based on valuation and expectations of delays in Voice over Internet Protocol E911 implementation. The company said it is positive on Intrado in the long term.