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The following list includes ratings changes and financial information for wireless companies announced this week by investment-banking and financial-services firms.
Click here for wireless ratings from past weeks from RCR Wireless News.
Carrier
- Standard & Poor’s Ratings Services raised its ratings on iPCS Inc., including its corporate credit rating, which was raised from CCC+ to B-, and the senior unsecured debt rating, which was raised from CCC to B-. The outlook is stable, said S&P. “The rating upgrade reflects improvement in the company’s credit protection measures following its emergence from bankruptcy in mid-2004, its enhanced business profile resulting from the July 2005 merger with Horizon PCS Inc., and adequate liquidity,” said Standard & Poor’s credit analyst Susan Madison.
Handset and infrastructure vendors
- Cowen & Co. initiated coverage on the wireless equipment sector. The company noted it has a positive view on the worldwide handset market.
- RBC Capital markets raised its price target on Palm Inc. from $21 to $23 after the company delivered a solid third quarter. However, it said some caution is warranted. The firm adjusted its fourth-quarter estimates to $1.58 million from $1.56 million and EPS of 84 cents rather than 79 cents. For fiscal 2007, RBC predicts revenue of $1.85 million from $1.79 million and EPS of $1.02 rather than 93 cents.
Other
- CIBC World Markets raised its price target and estimates on Brightpoint Inc., saying its checks suggest lower-than-expected seasonality in handset demand, upside from the launch of several MVNOs this year and a strong showing in India. The firm’s new price target on Brightpoint is $35 up from $24. For the first quarter, CIBC raised its revenue and EPS estimates to $572 million and 19 cents from $545 million and 16 cents. For 2006, it raised its estimates to $2.557 billion and 96 cents from $2.435 billion and 88 cents.
- Piper Jaffray lowered its rating on OmniVision Technologies from outperform to market perform on valuation and concerns about renewed competition from Micron and MagnaChip on image sensors for handsets.
- Merrill Lynch raised its price target on SBA Communications to $30 following its acquisition of AAT Communications.
- Standard & Poor’s Ratings Services revised its ratings outlook on Andrew Corp. to positive from stable and reiterated its corporate credit rating of BB on the company. “Ratings continue to reflect the highly competitive and cyclical spending environment of the wireless and cable television industries in which Andrew Corp. operates, as well as its acquisitive growth strategy,” noted Standard & Poor’s credit analyst Bruce Hyman. “This is partly offset by a solid financial profile for the rating, and Andrew’s strong market position in wireless infrastructure components. The revised outlook recognizes the company’s improving profitability trend, which could lead to higher ratings in the next year.”
- CIBC World Markets raised its price target on Stratex Networks from $6 to $7, saying its quarterly checks indicate the company is on track to deliver on its March quarter guidance and that its contract with Alcatel could drive upside to the company’s gross margins by late this year.
