Weekly wireless ratings wrap-up

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 said it took several rating actions on Rural Cellular Corp.‘s $570 million (in aggregate) secured financing. The loan rating on the company’s $60 million first-lien revolving credit facility was affirmed at ‘B+’ (two notches higher than the ‘B-‘ corporate credit rating on the borrower), and the recovery rating of ‘1’ also was affirmed. In addition, the debt rating on Rural Cellular’s existing $350 million 8.25-percent second-lien senior secured notes was raised to ‘B’ from ‘B-‘, and the recovery rating was raised to ‘1’ from ‘2’. Finally, the proposed $160 million add-on to the notes was also rated ‘B’ with a recovery rating of ‘1’.

   

• RBC Capital Markets raised its estimates on BellSouth Corp. based on higher wireless net additions, higher wireline margins and lower wireless costs offset by a 50-cent reduction in ARPU. 2006 EPS estimates increase from $2.29 to $2.42 and 2007 EPS estimates increased from $2.66 to $2.78. Morgan Stanley increased its estimates on BellSouth to $2.27 from $2.22 for 2006 and to $2.45 from $2.30 for 2007, reflecting improved metrics at Cingular and first-quarter results.

Handset and infrastructure vendors

•  

• Credit Suisse First Boston lowered its FY06 and FY07 estimates on Lucent Technologies Inc., saying it is concerned about the company’s ability to generate meaningful and sustainable operating profitability. CSFB’s new revenue estimates on Lucent are $9 billion and $9.4 billion, down from $9.4 billion and $9.8 billion for 2006 and 2007 respectively. EPS estimates change to 14 cents from 15 cents for both 2006 and 2007.

   

• CIBC World Markets lowered estimates on L.M. Ericsson on what it called disappointing first-quarter results. New estimates are revenues of $5.8 billion and 5 cents per share for the second quarter, down from $6 billion. For the year, CIBC predicts revenues of $23.9 billion and 21 cents per share, from $24.3 billion and 22 cents per share. Harris Nesbitt also reduced estimates on the company following its quarterly report. New estimates for 2006 are $1.88, down from $2.25. Estimates for 2007 dropped from $2.40 to $2.15. Prudential Equity Group lowered its estimates on the company to $2.06 from $2.14 for 2006 and to $2.30 from $2.38 for 2007. RBC Capital Markets reduced estimates to $1.94 from $2.09 for 2006 but raised 2007 estimates to $2.18 from $2.16.

   

• Credit Suisse First Boston raised its estimates on Nokia Corp. after the company reported strong first-quarter results. The firm raised its 2006 estimate 6 percent to 1.11 euros and its 2007 estimate 9 percent to 1.32 euros. Prudential Equity Group raised its price target on Nokia to $24 from $22 and raised its estimates to $1.20 from $1.09 for 2006 and to $1.30 from $1.16 for 2007. Lehman Brothers increased its price target on Nokia from $22 to $22.50.

   

• Lehman Brothers raised its estimates on Qualcomm Inc. after the company reported solid second-quarter results. For 2006, it expects EPS of $1.60 rather than $1.54, and for 2007 it expects EPS of $1.78 rather than $1.73. Its new price target on the company is $56, up from $54.

Other

• RBC Capital Markets raised its price target on American Tower Corp. from $35 to $37 on first-quarter results that exceeded expectations.

   

• First Albany Capital raised its price target on Tellabs Inc. from $15 to $19 after the company reported solid first-quarter results. In addition, it raised its estimates on the company for 2006 to 63 cents per share on revenues of $2.16 billion from 61 cents on revenues of $2.08 billion.

   

• Harris Nesbitt increased its estimates on RF Micro Devices after the company reported fiscal fourth quarter 2006 results that beat the firm’s expectations. For FY2007, it upped its forecast on RFMD to 35 cents from 24 cents. And for FY2008, it increased its EPS estimate to 30 cents from 20 cents. Credit Suisse First Boston raised its price target on RFMD from $7 to $8 and revised its 2006 revenue and EPS estimates to $995 million and 43 cents from $884 million and 35 cents. Also raising estimates on RFMD were Piper Jaffray and Pacific Growth Equities.

   

• Harris Nesbitt raised its estimates on Triquint Semiconductor on revenue increases during a typically weak quarter. For 2006, Harris Nesbitt expects EPS of 15 cents, rather than 11 cents, and for 2007 it expects 17 cents rather than 14 cents.

   

• Harris Nesbitt increased its estimates on Agere to 47 cents from 38 cents for 2006, saying the company’s performance is improving. For 2007, estimates increase from 42 cents to 67 cents.

   

• CIBC World Markets upgraded Anadigics Inc. to sector perform from sector underperform after the company reported solid first-quarter results with top-line growth coming from sequential increases in wireless and broadband. CIBC highlighted continued traction in GSM and third-generation wireless with Samsung and LG. CIBC also raised its estimates on Anadigics to $168 million in revenues and a loss of 17 cents per share for 2006, up from $152 million and a loss of 32 cents per share. For 2007, it expects EPS of 19 cents on revenues of $219 million, up from EPS of 5 cents on revenues of $177 million.

   

• CIBC World Markets raised its price target on Skyworks Solutions to $9 from $7 on better-than-expected second-quarter results. Harris Nesbitt slightly increased its estimates on the company, from 20 cents to 22 cents for 2006 and from 28 cents to 30 cents for 2007, noting concerns about the company’s gross margins. Credit Suisse First Boston raised its estimates from 25 cents on revenues of $794 million to 30 cents on $819 million for 2006; and from 38 cents on $893 million to 38 cents on $986 million for 2007. Also raising estimates on Skyworks were Pacific Growth Equities and Piper Jaffray.

   

• Credit Suisse First Boston revised its second-quarter estimates on RadioShack Corp. from 28 cents to 20 cents to reflect near-term challenges. CSFB said looking to the fourth quarter, it expects EPS in the range of 60 cents, above its previous estimate of 53 cents. RBC Capital Markets lowered estimates on the company to $1.15 from $1.35 for 2006 and to $1.35 from $1.55 for 2007.

   

• Harris Nesbitt raised its 2006 estimates on Trimble to $1.89 from $1.74 and its 2007 estimates to $2.05 from $1.93 following an analyst day presentation. Piper Jaffray raised its price target on Trimble from $43 to $50 following the presentation, which it called upbeat.

   

• Avondale Partners initiated coverage on Syniverse Technologies Inc. with a market outperform rating and a $19 price target.

   

• Credit Suisse First Boston raised its estimates but lowered its price target on Intersil Corp. on first-quarter results that were ahead of estimates. For 2006, it expects EPS of $1.05, up from $1.02, and for 2007 it expects EPS of $1.25, up from $1.23. It slightly lowered its price target to $31 from $32. Harris Nesbitt also raised its estimates on Intersil to $1.22 from $1.11 for 2006 and to $1.38 from $1.25 for 2007. Piper Jaffray raised its price target on the company from $32 to $34 and raised its EPS estimates on the company from $1.14 to $1.23 for 2006 and from $1.36 to $1.45 for 2007. RBC Capital Markets raised its EPS estimates on the company for 2006 to $1.21 from $1.16.

   

• RBC Capital Markets lowered its estimates on VeriSign Inc. after the company reported in-line to below-expectations revenues and lowered guidance. RBC lowered its estimates from $1.04 on revenues of $1.64 billion to $1 on $1.579 billion in revenues.

   

• RBC Captial Markets upgraded Sierra Wireless to sector perform from outperform and raised its price target on the company to $20 from $13, saying the company delivered stronger-than-expected first-quarter results. The firm also raised its 2006 estimates on the company to $209 million and 55 cents EPS from $179 million and 12 cents. For 2007, its estimates increased to $256 million and 81 cents from $221 million and 27 cents. Harris Nesbitt raised its 2006 pro forma EPS estimate on Sierra Wireless to 65 cents from 30 cents and its 2007 pro forma EPS estimate to 66 cents from 47 cents after the company reported first-quarter results that beat Harris Nesbitt’s expectations. The company also offered significantly higher guidance for the second quarter. Harris Nesbitt also raised its price target on Sierra to $17. Avondale raised its price target on Sierra to $18 and increased its 2006 estimates on the company to 48 cents and 2007 estimates to 64 cents. Piper Jaffray raised its price target on Sierra from $16 to $19 and increased its 2006 estimates to 62 cents from 43 cents and its 2007 estimates to 93 cents from 80 cents. Lehman Brothers also raised its estimates on the company from 23 cents to 60 cents for 2006 and from 63 cents to 78 cents for 2007 and raised its price target to $18 from $16. Meanwhile, Avondale Partners downgraded Sierra from market outperform to market perform on valuation.

   

• Credit Suisse First Boston raised its estimates on Broadcom Corp. on revenues that beat estimates and guidance, and an outlook that is better than expected. CSFB’s new estimates for the company are 85 cents on revenues of $3.84 billion, up from 80 cents on $3.71 billion in revenues. Harris Nesbitt raised its estimate on the company for 2006 to $1.46 from $1.40 and to $1.57 from $1.50 fro 2007. Prudential Equity Group raised its price target on Broadcom from $52 to $59 and increased its 2006 EPS estimate on the company to 94 cents from 81 cents.