The following list includes ratings changes and financial information for wireless companies announced this week by investment-banking and financial-services firms.
Carriers
Robert W. Baird adjusted estimates on Alltel Corp. following the company’s third-quarter report. Baird raised its estimates on Alltel to EPS of $3.45 from $3.38 for 2005 and to EPS of $3.61 from $3.58 for 2006.
Prudential Equity upgraded SBC Communications Inc. from underweight to neutral weight based on valuation. Robert W. Baird raised its earnings estimates on SBC Communications, to $1.66 from $1.57 for 2005 and to $1.83 from $1.64 for 2006, to reflect higher wireline and wireless margins. Baird also raised its price target on the telco to $26 from $25.
Standard & Poor’s Ratings Services upgraded its corporate credit rating on IWO Holdings Inc. from CCC+ to BBB- following the completion of Sprint Nextel Corp.’s acquisition of IWO for $427 million.
Handset and Infrastructure Vendors
RBC Capital Markets upgraded Research In Motion Ltd. to outperform from sector perform, saying rumors of the demise of the BlackBerry are greatly exaggerated.
Standard & Poor’s Ratings Services revised its outlook on Ericsson to stable from positive following its agreement to buy 75 percent of the assets of Marconi plc. CIBC World Markets slightly lowered its estimates on Ericsson following the vendor’s mixed third-quarter report. Ericsson’s revenues fell short of CIBC’s expectations and EPS results were in line with expectations.
Piper Jaffray increased its 2006 revenue estimates for Motorola Inc.’s handset division, saying it expects the company to continue to gain share in the first half of next year. The firm said it expects Motorola’s earnings growth could slow next year due to an increased mix of lower-end phones and declining margins in its networks business. Further, Piper Jaffray lowered 2006 EPS estimates on the company from $1.25 to $1.20 while increasing its revenue estimates from $39.6 billion to $39.9 billion due to the impact of stock-based compensation offset by the slight increase in its handset revenue estimates.
Piper Jaffray adjusted its revenue and EPS estimates on Nokia following the vendor’s third-quarter report, which was characterized by disappointing network margins but improvements in its handset portfolio. Piper Jaffray adjusted its 2005 estimates from 98 cents per share on revenue of $40.7 billion to 98 cents on revenue of $40.9 billion. 2006 estimates change from $1.12 on revenue of $43.1 billion to $1.09 on revenue of $43.5 billion.
International
Standard & Poor’s Ratings Services raised its local currency corporate credit rating on Thailand’s Advanced Info Service Public Co. Ltd. to A- from BBB+ and affirmed its foreign currency corporate credit rating at BBB+. The outlook on both ratings is stable.
Standard & Poor’s Ratings Services revised its outlook on Portugal Telecom SGPS S.A. to negative from stable due to strong operating pressure. S&P said, “The operating performance and prospects of PT’s mobile domestic operations, which are a key component of the ratings on the group, are weakening materially under strong regulatory pressure on interconnection rates, increasing competition, and the weak economic environment in Portugal. At the same time, the group’s Brazilian mobile operation, Vivo N.V. , is undergoing fierce competition in an overcrowded market at a time when Vivo is making significant investments in its network. As a result, and despite resilient domestic fixed line and multimedia businesses, PT’s EBITDA minus capital expenditure fell by 16 percent year on year in the first half of 2005.”
Standard & Poor’s Ratings Services affirmed its A- long-term and A-2 short-term corporate credit ratings on Norway’s Telenor ASA following the company’s announcement that it is increasing its indirect shareholding in Thai mobile operator Total Access Communication Public Co. Ltd. The outlook on the company is stable.
Other
RBC Capital markets upgraded InfoSpace Inc. to outperform from sector perform and raised its price target to $30 from $25. RBC said InfoSpace’s quarterly results underscore more stability in operations.
UBS raised its price target on Avaya Inc. from $13 to $14 and maintained its buy rating on the company. Avaya reported solid fourth-quarter results.
JP Morgan lowered estimates on Texas Instruments Inc. , saying fundamentals are peaking but said there is downside potential in the first half of next year due to a seasonal decrease in demand and inventory reduction
Prudential Equity lowered its earnings-per-share estimates on RadioShack Corp. , from $1.90 to $1.86 for 2005 and from $2.30 to $2.13 for 2006, after the company reported third-quarter results. The lowered estimates reflect lowered EPS pro forma guidance. Prudential noted the retailer could benefit next year from easy comps in wireless, from its new deals with Sprint and Cingular and from its overhaul of store operations.
McAdams, Wright, Ragen upgraded TriQuint Semiconductor from hold to buy and assigned it a $5 price target after the company reported what it called solid third-quarter results. Piper Jaffray lowered its fourth-quarter estimates on TriQuint Semiconductor from 4 cents on revenues of $88 million to 2 cents on revenues of $84 million following TriQuint’s earnings report. Piper Jaffray cited challenges including growing competition as it focuses more heavily on the handset component market, the company’s low capacity utilization rate and potential price pressure in GSM handsets.
Prudential Equity raised 2006 earnings-per-share estimates on Broadcom Corp. to $1.79 from $1.61 due to higher revenue growth assumptions and raised its price target to $55 from $49.
Prudential Equity raised its EPS estimates on Convergys Corp. to $1 from 94 cents for 2005 and to $1.09 from $1.01 for 2006 based on two expected employee care deals. Convergys missed consensus estimates for its third-quarter revenues. Robert W. Baird also raised earnings estimates, to $1.07 from 98 cents for 2006 and to $1.15 from $1.10 for 2006 to reflect lower expenses at the company.
