The following list includes ratings changes and financial information for wireless companies announced this week by investment-banking and financial-services firms.
Carriers
Fitch Ratings placed Telephone and Data Systems Inc. and United States Cellular on Ratings Watch Negative following the announcement that TDS intends to restate its financials for the years 2000 to 2004 and the first two quarters of 2005. About $1.9 billion in debt is affected by Fitch’s action.
Robert W. Baird raised its 2006 revenue and EBITDA estimates on Alamosa Holdings Inc. from $332.2 million and $436.8 million respectively to $341.4 million and $446.5 million.
Robert W. Baird lowered its 2005 and 2006 earnings-per-share forecasts for Cincinnati Bell Inc. to 19 cents and 23 cents respectively from 20 cents and 24 cents, reflecting its lower wireless EBITDA forecasts. The company reported lower-than-expected results, although wireless and digital subscriber line results beat expectations. However, Baird said it remains concerned about competitive issues in the local and wireline businesses.
Robert W. Baird lowered its estimates on SunCom Wireless for 2005 EBITDA from $68.5 million to $53.9 million and 2006 EBITDA from $95.7 million to $85.4 million. SunCom’s third-quarter subscriber and revenue figures fell short of expectations, although roaming revenue was higher than expectations driven by strong traffic from T-Mobile USA, said Baird.
Prudential adjusted its estimates on Sprint Nextel Corp. to fourth-quarter earnings per share of 30 cents from 31 cents, fiscal 2005 EPS to $1.42 from $1.45 and fiscal 2006 EPS to $1.60 from $1.63. Prudential rates the carrier at overweight with a $33 price target.
Other
Prudential Equity raised its December quarter estimates on Broadcom Corp. to EPS of 45 cents from 43 cents and 2006 EPS estimates to $1.86 from $1.79. Prudential also increased its price target on the company from $55 to $56.
Robert W. Baird lowered its price target on Cisco Systems Inc. to $20 from $22, saying the company will be challenged to meet its fiscal year 2006 guidance. Cisco’s fiscal first-quarter revenues were in line with expectations, while EPS exceeded forecasts. UBS reduced its price target on the company to $19.50 and maintained its neutral rating on the company. RBC Capital Markets reduced its price target on the company from $25 to $21
First Albany Capital slightly raised its revenue estimates on Carrier Access Corp. for 2005 from $75.2 million to $76.8 million after the company reported revenues that beat expectations. The company’s EPS fell slightly short of First Albany’s estimates.
CIBC World Markets adjusted its estimates on Alvarion for the fourth quarter to revenues of $50.4 million and earnings per share of 3 cents from revenues of $47.4 million and EPS of 2 cents. For 2006, CIBC forecasts revenues of $220.6 million and 3 cents per share from $214.1 million and 5 cents per share. Alvarion’s third-quarter results came in slightly below expectations. However, despite its caution about the company’s cellular business, CIBC said the company remains a leader in its market and WiMAX has long-term potential for the company.
First Albany Capital slightly lowered its estimates on Jamdat Mobile Inc. to revenues of $24.4 million and EPS of 20 cents for the fourth quarter from $25.1 million and 22 cents per share. Jamdat reported in-line third-quarter results. First Albany rates the company at neutral.
CIBC World Markets adjusted its fourth-quarter revenue and earnings-per-share estimates on Brightpoint to $568 million and 32 cents per share from $566 million and 32 cents per share. Estimates for 2005 remain unchanged.
Lehman Brothers raised its price target on Crown Castle International to $30 from $27 after the company reported strong third-quarter results.
RBC Capital Markets raised its price target and estimates on tower company SBA Communications Inc. after the company reported third-quarter results that exceeded expectations. The company’s new price target is $18, up from $16. RBC rates SBA at outperform. Lehman Brothers also raised its price target on SBA, to $20 from $18.
First Albany Capital lowered its rating on Wireless Facilities Inc. from buy to neutral after the company reported third-quarter revenues that fell short of estimates and guidance. First Albany also adjusted its estimates on the company, calling for revenues of $471.2 million in 2006, down from $545 million, and earnings-per-share estimates change to 28 cents for the year, down from 40 cents. Going forward, the firm said it expects Wireless Facilities to grow its enterprise and government businesses, but wireless carrier business growth could slow. Avondale Partners also lowered its expectations on the company for 2005 and 2006 to reflect new guidance. Avondale rates the company at market perform.
First Albany Capital increased its price target on Hewlett-Packard Co. to $32 from $30 and also increased its 2005 and 2006 revenue and earnings-per-share estimates on the company to reflect slightly higher profitability assumptions.
CIBC World Markets raised its estimates on Powerwave Technologies for the fourth quarter from revenues of $809.2 million to $827.7 million and earnings per share from 45 cents to 49 cents. For 2006, the firm raised its EPS estimates to 72 cents from 63 cents. CIBC introduced 2007 estimates of $1.2 billion and 80 cents per share. The adjustment came after the company reported strong third-quarter revenue and EPS results, and CIBC said it expects the company to outpace the industry by tapping outsourcing opportunities and new application areas such as indoor coverage. Piper Jaffray also adjusted its estimates on the company, to 51 cents per share on revenues of $828 million for the year from 44 cents per share on revenues of $841 million. For 2006, Piper Jaffray estimates 73 cents per share on revenue of $1.1 billion, up from 66 cents per share and the same revenue figure. Robert W. Baird slightly raised its 2005 estimates to revenues of $826 million and 51 cents per share from $819 million and 46 cents per share.
First Albany Capital raised its fourth-quarter earnings-per-share estimates on InterDigital Communications Corp. to 4 cents from 3 cents and kept its revenue forecast of $39.9 million the same. InterDigital reported 3Q revenues that slightly beat estimates, but EPS came in below estimates. First Albany also maintained its 2006 revenue estimate of $156.9 million and raised its EPS estimates for the year to 28 cents from 27 cents. First Albany rates InterDigital at neutral. Piper Jaffray adjusted its fourth-quarter estimates on the company from 26 cents per share on revenues of $57 million to 6 cents per share on revenues of $41 million and its 2006 estimates from 62 cents on revenues of $202 million to $3.22 on revenues of $433 million. Piper Jaffray rates the company at Market Perform.
First Albany Capital revised its estimates on UTStarcom Inc. for the fourth quarter to revenues of $680 million from $683.6 million and a loss per share of 55 cents from a loss of 16 cents. UTStarcom reported third-quarter results including a decrease in sales. First Albany noted the company is still in restructuring mode. The firm rates UTStarcom at underperform.
RBC Capital Markets raised its price target on American Tower Corp. to $28 from $26 to reflect higher out year cash flows and anticipated impacts from the company’s share buyback program. RBC rates American Tower at outperform and names the company as its favorite pick within the tower sector. Lehman Brothers raised its price target on American Tower to $30 from $28.
