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 cut its corporate credit and unsecured debt ratings on Sprint Nextel Corp. to BBB+ from A- and revised its outlook to negative from stable. “The downgrade reflects a more aggressive financial policy, while the outlook change is the result of concerns about recent operating performance,” said Standard & Poor’s credit analyst Allyn Arden.
- Credit Suisse First Boston lowered its estimates on Alltel Corp. after the carrier reported in-line quarterly results and lowered guidance on operating EBITDA. CSFB lowered its EPS estimate for 2006 on the company to $3.02 in part because of a later-than-expected closing of the Midwest Wireless acquisition. RW Baird raised its estimates on Alltel to $2.40 from $2.32 for 2006 and to $2.84 from $2.76 for 2007.
- Prudential Equity Group lowered its estimates on Verizon Communications after the carrier slightly missed second-quarter earnings forecasts. New estimates are $2.45, down from $2.55, for 2006, and $2.60, down from $2.70, for 2007. RW Baird raised its 2006 EPS estimates on the company to $2.57 from $2.50 but lowered its 2007 estimates on the company to $2.66 from $2.67.
- Standard & Poor’s Ratings Services affirmed its ratings on SunCom Wireless Holdings Inc. and removed the ratings from CreditWatch. The outlook is negative. The ratings were placed on CreditWatch with negative implications early this year when the company announced it had hired financial and legal advisers to consider alternatives to improve its financial position. “The affirmation reflects our belief that a bankruptcy filing or restructuring announcement by the parent company or its operating subsidiaries, while still possible, is less imminent,” said Standard & Poor’s credit analyst Susan Madison.
Handset and infrastructure vendors
- RW Baird downgraded Nortel Networks to neutral from outperform based on a more challenging outlook for Nortel’s North American CDMA wireless business. In addition, the firm lowered its 2006 estimates on the company to a loss of 12 cents per share on revenues of $10 billion from earnings of 4 cents per share on revenues of $11.2 billion. Baird noted it believes the vendor is looking to sell its UMTS assets and that the company could concede the 3G UMTS space to other vendors while it focuses on 4G UMTS technologies. Baird lowered its price target on the company to $2 from $3. RBC Capital Markets raised its EPS estimates on Nortel to 8 cents from 2 cents for 2006.
Other
- RW Baird downgraded Cisco Systems Inc. to neutral from outperform, saying the enterprise environment appears to be weakening.
- RBC Capital Markets lowered its price target on Infospace Inc. from $31 to $28 after the company reported a mixed second quarter. RW Baird raised its estimates on the company to a return of 12 cents per share from a loss of 5 cents per share for 2006 and to profit of 10 cents per share from 4 cents per share for 2007.
- First Albany Capital lowered its price target on Stratex Networks Inc. to $5.50 from $6.75 after the company reported mixed quarterly results. In addition, First Albany raised its revenue and EPS estimates on the company for FY07 to 21 cents on $263.7 million from 20 cents on $260.8 million.
- CIBC World Markets upgraded Alvarion to sector perform from sector underperform, saying the company’s costs are now more in check and cellular business downside is already fully reflected in Alvarion’s stock price. The firm’s 2006 EPS estimates on Alvarion increase to breakeven from a loss of 7 cents per share while revenue estimates remain at 206.1 million. Its 2007 EPS estimate on the company increases to 27 cents from 20 cents while its revenue estimate stays at $248.2 million. First Albany Capital lowered its 2006 revenue estimate on the company to $203.9 million from $209.7 million. RBC Capital Markets raised its estimates on the company for 2006 to breakeven from a loss of 5 cents per share.
- First Albany Capital raised its estimates on InterDigital Communications Corp. after the company reported in-line second-quarter results. New EPS and revenue estimates for 2006 are $3.97 on $483.9 million, up from $3.90 on $477.6 million.
- First Albany Capital downgraded Powerwave Technologies Inc. from buy to neutral after the company reported mixed second-quarter results and disappointing guidance. It also lowered its estimates on the company to 37 cents per share on $863.4 million from 58 cents on $982.6 million for 2006 and to 50 cents on $920 million from 83 cents on $1.141 billion for 2007. R W Baird also downgraded Powerwave, to neutral from outperform, and lowered its price target to $7 from $15. Baird’s new estimates on the company are 35 cents down from 62 cents for 2006 and 42 cents down from 72 cents for 2007. Credit Suisse First Boston lowered its price target on Powerwave to $12 from $18.
- Merrill Lynch upgraded American Tower Corp. from neutral to buy saying it believes an update on the progress of the company’s internal inquiry will help mitigate the overhang associated with historical stock-option prices. American Tower released an update on the internal review with the conclusion that stock-option grant timing discrepancies were likely and that it may need to record additional non-cash compensation expenses.
- CIBC World Markets tweaked its estimates on Brightpoint, saying the company’s second quarter results marked a turnaround in the making. For 2006, it raised its EPS expectations on the company to 80 cents from 74 cents and raised its 2007 EPS estimates to 95 cents from 94 cents.
- RW Baird lowered its rating on Tellabs Inc. to neutral from outperform and dropped its price target on the company to $12 from $20 on concerns about lowered guidance and decreasing visibility due to consolidation. Baird also lowered its estimates on the company to EPS of 59 cents on revenues of $2.12 billion from 61 cents on $2.15 billion. For 2007, it lowered its estimates to EPS of 66 cents on revenues of $2.2 billion from 75 cents on $2.35 billion.
- RW Baird slightly raised its estimates on Pctel Inc. after the company reported good second-quarter results. The company’s new EPS estimate for 2006 is 23 cents, up from 22 cents, and for 2007 it is 40 cents up from 39 cents.
- BMO Capital Markets lowered its estimates on Sierra Wireless after the company reported better-than-expected results but a lower-than-expected outlook. For 2006, it now expects EPS of 39 cents, down from 65 cents, and for 2007 it predicts EPS of 46 cents, down from 66 cents. It also lowered its price target on the company to $12 from $17. Avondale Partners lowered its price target on Sierra to $15 from $18.
