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
- RW Baird raised its rating on AT&T Inc. on strong earnings momentum. It also raised its estimates on the company to $2.22 from $2.09 for 2006 and to $2.44 from $2.21 for 2007. In addition, Baird raised its price target on AT&T to $34 from $29. Morgan Stanley raised its estimates and price target on AT&T based on strong year-to-date results and better guidance. The firm raised its price target on AT&T to $33 from $31. Credit Suisse First Boston also raised its estimates on the carrier, to $2.21 from $2.12 for FY06 and to $2.42 from $2.31 for FY07. CSFB raised its price target on AT&T to $34.
- Standard & Poor’s Ratings Services withdrew its ratings on Virgin Mobile USA L.L.C. The ratings had been placed on CreditWatch with negative implications in April because the company was not in compliance with minimum revenue covenants under its credit agreement. S&P said the company and its lenders have restructured the bank facility and because the facility will not be syndicated at this time, the ratings have been withdrawn at the company’s request.
- Standard & Poor’s Ratings Services revised its outlook on Dobson Communications Corp. to developing from negative and affirmed its B- corporate credit rating. “The outlook revision reflects improvement in operating trends for the first half of 2006, after a challenging 2005 marked by a 7-percent annual decline in Dobson’s postpaid subscriber base,” said Standard & Poor’s credit analyst Susan Madison. In related news, S&P assigned a B+ rating and 1 recovery to American Cellular Corp.’s proposed $250 million senior secured credit facility. American cellular is a wholly owned subsidiary of Dobson.
Handset and infrastructure vendors
- RBC Capital Markets lowered its estimates on Alcatel to 78 cents from 81 cents for 2006 and to 84 cents from 95 cents for 2007. The firm noted persisting concerns related to pricing and intensifying competition in wireless.
- RBC Capital Markets lowered its estimates on Lucent Technologies Inc. after the company reported quarterly results. Its new EPS estimate on the company for 2006 is 13 cents from 14 cents and its 2007 EPS estimate is 16 cents, down from 18 cents. Credit Suisse First Boston lowered its estimates on Lucent to $8.57 billion from $9 billion for FY06 and to $9.15 billion from $9.42 billion for FY07. EPS estimates drop to 13 cents for FY06 and to 14 cents for FY07. Prudential Equity Group slightly raised its EPS estimates on the company for 2006 to 15 cents from 14 cents due to lower interest expense and gross margin recovery. RW Baird also raised its estimates on the company to 15 cents from 14 cents for 2006.
- CIBC World Markets increased its EPS estimates on Motorola Inc. after the company announced it is stepping up its share buyback plans.
- RBC Capital Markets lowered its price target on Nortel Networks to $3 from $3.50 to factor in a reduction in its top line growth estimate for the company. It also lowered its EPS estimate on the company to 2 cents from 3 cents for 2006.
- Prudential Equity Group slightly increased its EPS estimate on L.M. Ericsson to $1.97 from $1.96 for FY06 after the company reported mixed second-quarter results. RBC Capital Markets lowered its estimates on Ericsson to $1.98 from $2.02 for 2006 and to $2.24 from $2.31 for 2007. RBC also lowered its price target on Ericsson to $34 from $37. BMO Capital Markets raised its estimates on Ericsson to $1.99 from $1.89 for 2006 and to $2.25 from $2.18 for 2007. BMO lowered its price target on the company to $35 from $38.
Other
- CIBC World Markets tweaked its estimates on Novatel Wireless after the company reported quarterly results. For 2006, its estimates increase to earnings of 16 cents on revenues of $200.8 million from 10 cents on $200.3 million. For 2007, it lowered its revenue estimates on the company to $248.6 million from $255.6 million but raised EPS estimates to 48 cents from 41 cents.
- BMO Capital Markets lowered its estimates on RF Micro Devices after the company reported results in line with its expectations. EPS estimate for 2007 drop to 33 cents from 35 cents and 2008 EPS estimates drop to 28 cents from 30 cents. CSFB lowered estimates and its price target on the company. Its new price target is $6.40, down from $7.20. For 2007, estimates decrease to revenues of $984 million from $1.01 billion for FY07. CIBC World Markets lowered its estimates on the company to 47 cents on $1.03 billion for FY07, down from 51 cents on revenues of $1.042 billion. For 2008, it reduced its estimates on the company to 58 cents on revenues of $1.165 billion from 62 cents on revenues of $1.182 billion.
- Credit Suisse First Boston raised its estimates on Flextronics International after the company released a promising revenue outlook. For 2007, CSFB forecasts EPS of 76 cents rather than 69 cents. For 2008 it expects EPS of 97 cents rather than 85 cents. RBC Capital Markets raised its 2007 estimates on Flextronics to 80 cents from 72 cents.
- First Albany Capital raised its estimates on Atheros Communications Inc. after the company reported revenue and EPS that beat estimates. New estimates for FY06 are revenues of $298.3 million and 70 cents per share, up from $283 million and 66 cents per share. For FY07, First Albany predicts revenues of $360 million and 90 cents per share, up from $345 million and 85 cents per share.
- BMO Capital markets lowered its price target on Texas Instruments Inc. to $35 from $41 after the company reported in-line results. Credit Suisse First Boston adjusted its estimates on the company to $14.58 billion and $1.61 per share for 2006, up from $14.43 billion and $1.60 per share. 2007 estimates change to $16.39 billion and $1.92 per share from $16.42 billion and $1.91 per share. Prudential Equity Group lowered its FY06 EPS estimates on the company to $1.73 from $1.76.
- CIBC World Markets adjusted its estimates on Anadigics Inc. after the company reported quarterly earnings that were in line with expectations. For FY06, CIBC raised its estimates on the company to $169.1 million and breakeven EPS from $168 million and a loss of 1 cent per share. For FY07, the firm expects revenues of $214.1 million and 36 cents per share from $219.4 million and 35 cents per share.
- Prudential Equity Group downgraded RadioShack Corp. to underweight from neutral due to concerns about challenges the company faces especially in its wireless business. RBC Capital Markets lowered its estimates on RadioShack to $1 from $1.10 for 2006 and to $1.15 from $1.25.
- CIBC World Markets lowered its estimates on Skyworks Solutions Inc. after the company offered disappointing guidance for the September quarter. For the fiscal 2006 year, CIBC lowered its estimates on the company to 20 cents on $778.7 million from 23 cents on $792 million. For 2007, it lowered its estimates to 28 cents on $817.5 million from 39 cents per share on revenues of $863 million. CIBC also lowered its price target on the company to $7 from $9. BMO Capital Markets also lowered its estimates on the company to 20 cents from 22 cents for FY2006 and to 25 cents from 30 cents for FY07. BMO lowered its price target on Skyworks to $3.50 from $5. Credit Suisse First Boston lowered its price target on the company to $4.50 from $5 and decreased its FY07 estimates on the company to $801 million and 5 cents per share from $867 million and 23 cents per share.
- First Albany Capital reduced its estimates on Powerwave Technologies Inc. after Cingular Wireless estimated its capital expenditures for the year might be closer to the low end of its range. For 2006, First Albany lowered its estimates on Powerwave to $240 million from $245 million and dropped its full-year estimate to $983 million from $1.011 billion.
- First Albany Capital lowered its price target on Tellabs Inc. to $13.50 from $19 in advance of the company’s financial report this week. The company currently trades at about $11.15.
- BMO Capital Markets adjusted its estimates on Freescale Semiconductor. For 2006 it predicts EPS of $2.30, up from $2.10, but for 2007 it lowered its EPS estimate on the company to $2 from $2.14. Credit Suisse First Boston raised its estimates on the company to $6.34 billion and $2.15 per share for 2006, up from $6.24 billion and $2. For 2007, its revenue estimates increase to $6.78 billion from $6.64 billion, but its EPS forecast drops from $2 to $1.92.
- Credit Suisse First Boston lowered its estimates on Broadcom Corp. after the company released only limited earnings results due to its pending financial restatement related to options accounting. New 2006 revenue and EPS estimates are $3.68 billion and 68 cents per share, down from previous estimates of $3.84 billion and 85 cents per share. CSFB also lowered Broadcom’s price target to $30 from $55. BMO Capital Markets lowered its estimates on the company to $1.29 vs. $1.46 for 2006 and to $1.30 vs. $1.57 for 2007. It also cut its price target on the company to $33 from $47. Prudential Equity Group lowered its price target on Broadcom to $35 from $59 and decreased its 2006 EPS estimate on the company to 78 cents from 94 cents and its 2007 estimate to $1.15 from $1.21.
