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
- Credit Suisse First Boston raised its estimates and price target on AT&T Corp., saying the second quarter should provide evidence of improving margins at the company. For 2006, CSFB expects AT&T’s EPS to be 54 cents rather than 52 cents. It increased its price target on the carrier to $2.12 from $2.08.
- Credit Suisse First Boston lowered its price target on Sprint Nextel Corp. from $27 to $25 and lowered its net add estimates for the carrier for 2006.
Handset and infrastructure vendors
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Prudential Equity Group lowered its estimates on L.M. Ericsson to reflect slower spending due to carrier consolidation in the United States and Europe and softer margins due to the integration of Marconi. New EPS estimates on the company for FY06 are $1.96, down from $2.06.
- R.W. Baird downgraded Lucent Technologies Inc. to neutral from outperform and lowered its price target on the company from $4 to $3 after the vendor announced third-quarter results. Baird also lowered estimates to $8.49 billion and 14 cents per share for fiscal 2006 from $8.93 billion and 17 cents per share. Credit Suisse First Boston lowered its estimates on Lucent and dropped its price target on the company to $2 from $3. The firm said it is concerned with Lucent’s ability to generate meaningful and sustainable operating profitability. RBC Capital Markets also lowered its estimates on Lucent from revenues of $9.6 billion and 17 cents per share for 2006 to $8.7 billion and 14 cents per share. Prudential Equity Group lowered its estimates on Lucent to EPS of 14 cents for the fiscal year from 15 cents.
- Piper Jaffray lowered its estimates on Motorola Inc. to reflect the close of the sale of its automotive electronics business to Continental AG. New revenue estimates for the June quarter are $10.1 billion, down from $10.5 billion. CIBC World Markets also adjusted its estimates on Motorola to $10.4 billion and 31 cents per share from $10.8 billion and 32 cents per share for second-quarter 2006; to $42.9 billion and $1.33 per share from $44.1 billion and $1.35 per share for FY06; and to $44.9 billion and $1.50 from $46.5 billion and $1.53 for FY07. Credit Suisse First Boston lowered its estimates on Motorola to $41.3 billion from $42.9 billion for 2006 and to $44 billion from $45.6 billion for 2007. EPS estimates for 2006 decrease to $1.36 from $1.38 and its 2007 EPS estimate remains unchanged at $1.55.
Global Wireless
- Credit Suisse First Boston downgraded TeliaSonera from outperform to neutral.
Other
- CIBC World Markets slightly raised its estimates on Stratex Networks after the company said it expects its results to hit the high end of its previous guidance. For fiscal year 2007, CIBC expects the company to report $279 million in revenues and 21 cents per share, up from $271 million and 20 cents per share. Estimates for 2008 increase to $322 million and 32 cents per share from $313 million and 31 cents per share.
- R.W. Baird downgraded Tekelec to neutral from outperform and lowered its expectations on the company based on poor financial results and “dismal visibility.” For 2006, Baird is forecasting a loss of 38 cents per share, a huge reversal from previous expectations of a return of 50 cents per share. For 2007, it now expects a loss of 26 cents per share rather than a return of 75 cents. Revenue estimates for 2006 drop from $600 million to $433 million and for 2007 from $665 million to $423 million. Baird also lowered its price target on the company to $9.
- Piper Jaffray downgraded InterDigital Communications Corp. on valuation, saying the company’s long-term potential is already priced into the company’s stock.
- First Albany Capital upgraded Atheros Communications Inc. on expectations for the company’s earnings report expected to be released July 24.
- First Albany Capital downgraded NMS Communications from strong buy to neutral after the company reported disappointing preliminary second-quarter results. It also lowered estimates for fiscal 2006 to a loss of 2 cents on $110.6 million in revenues from a return of 16 cents on revenues of $128 million. Piper Jaffray lowered its price target on NMS from $5 to $4 and reduced its FY06 estimates on the company from $125.7 million and 17 cents per share to $117.7 million and 6 cents per share. It also lowered its 2007 estimates on the company.
- RBC Capital Markets lowered its estimates and price target on Openwave Systems Inc. after the company pre-announced fiscal fourth-quarter results. The company’s price target drops from $18 to $9. RBC lowered its estimates on the company for FY2007 to $430.2 million and 56 cents earnings per share from $552 million and 95 cents. R.W. Baird also lowered estimates on the company, to 56 cents from 78 cents for FY06 and to 55 cents from $1 for FY07.
