The following list includes ratings changes and financial information for wireless companies announced this week by investment-banking and financial-services firms.
Carriers
Standard & Poor’s Ratings Services affirmed its A- corporate credit rating on Sprint Nextel Corp. and its subsidiaries, while all ratings for Nextel Partners Inc., including its BB corporate credit rating, remain on CreditWatch with positive implications. Sprint Nextel announced it plans to purchase Nextel Partners at $28.50 per share.
Prudential Equity Group initiated coverage on Sprint affiliate iPCS Inc. with a neutral rating. Prudential said it believes the wireless sector is the most attractive segment in telecom and that Sprint affiliates provide small-cap alternatives that have greater potential upside for subscriber and revenue growth. The firm said it believes iPCS is trading near its takeout price when taking into account Sprint’s trend of acquiring its affiliates. Prudential placed a $47 price target on the carrier and said it believes an acquisition is the most likely scenario.
Handset and Infrastructure Vendors
RBC Capital Markets revised its estimates on Research In Motion Ltd. after the company beat third-quarter consensus estimates. RBC changed its revenue and EPS estimates for fiscal 2006 to $2.114 billion and $2.67 from $2.092 billion and $2.62, and for 2007 to $2.787 billion and $3.50 from $2.787 billion and $3.51. UBS raised its fourth-quarter EPS estimates on RIM.
RBC Capital Markets raised its March quarter revenue estimate on Motorola Inc. from $9.16 billion to $9.22 billion as its mobile device shipment assumptions move from 38 million to 39 million. The company’s EPS estimate on Motorola for the quarter remains at 27 cents. RBC rates Motorola at outperform.
International
RBC Capital Markets reduced its 2006 EPS estimate on Telus from $2.76 to $2.57 and 2007 EPS estimate from $3.37 to $3.26, to reflect higher pension expenses, interest/depreciation assumptions and higher wireless acquisition costs. The changes come despite Telus’ encouraging 2006 guidance, which was in line to slightly ahead of expectations. RBC also noted wireless and DSL subscriber guidance greatly exceeded forecasts.
Other
First Albany Capital adjusted its fiscal 2006 estimates on Alvarion Ltd. to reflect a new order it received from Telmex. Revenue estimates increase from $224.5 million to $231.4 million and earnings-per-share estimates drop from 11 cents to 9 cents.
Prudential Equity Group lowered its fiscal 2006 and fiscal 2007 estimates on Electronic Arts after the company warned its guidance is too optimistic and that it has experienced weak demand in North America and Europe. Prudential lowered its revenue and earnings-per-share estimates for 2006 to $3.08 billion and $1.25 from $3.14 billion and $1.35, and for 2007 to $3.3 billion and $1.55 from $3.4 billion and $1.64. Prudential also lowered its price target on the company to $46 from $49. It rates EA at overweight.
Robert W. Baird raised its estimates and price target on Tektronix Inc. after the company reported fiscal second-quarter results that beat Street expectations. Baird raised its third-quarter EPS estimate to 32 cents from 27 cents. Fiscal year 2006 EPS estimates increase to $1.26 on $1.03 billion in sales from a previous estimate of $1.17. Baird raised its price target on the company to $31.
UBS raised its price target on Tellabs to $14 from $11.50 based on new 2007 estimates, ongoing strength in broadband access and OM expansion. UBS rates Tellabs at buy.
