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

• RBC Capital Markets downgraded Sprint Nextel Corp. to sector perform from outperform and lowered its price target on the company from $28 to $20 after the carrier reported disappointing second-quarter results and a reduced outlook. The firm’s new EPS estimate on the company for 2006 is $1.08, down from $1.19. Its EPS estimate for 2007 is $1.24 down from $1.45. Morgan Stanley lowered its price target on Sprint Nextel to $18 from $21. Credit Suisse First Boston lowered its price target on the carrier to $23 from $25 and decreased its estimates to $1.33 for 2006 and $1.47 for 2007. Prudential Equity Group lowered its price target on Sprint Nextel to $19 from $21 and lowered its estimates on the company to $1.20 from $1.25 for 2006 and to $1.40 from $1.60 for 2007. RW Baird lowered its price target on the company to $20 from $23.

Handset and infrastructure vendors

• Prudential Equity Group lowered its rating on Nortel Networks to neutral from overweight due to lack of foreseeable restructuring progress, difficult-to-reach profitability goals for this year and next year and limited consolidation options. Prudential also lowered its price target on Nortel to $2.50 from $4 and decreased its EPS estimates on the company to a penny from 7 cents for 2006 and to 8 cents from 22 cents for 2007. RW Baird increased its outlook on Nortel, to a loss of 1 cent rather than a loss of 12 cents per share for 2006 and EPS of 12 cents rather than 10 cents for 2007.

Other

• Standard & Poor’s Ratings Services switched Andrew Corp.’s CreditWatch status to negative from developing after the company rejected buyout bids from both ADC Telecommunications and CommScope Inc.

   

• CIBC World Markets increased its estimates on Brightpoint after the handset distributor announced a logistics agreement with T-Mobile USA. For 2006 it adjusted its EPS estimate to 83 cents from 80 cents and maintained its revenue estimate of $2.4 billion. For 2007, it expects $2.67 billion and EPS of $1.07 from $2.57 billion and EPS of 95 cents.

   

• First Albany Capital adjusted its estimates on Wireless Facilities Inc. after the company reported in-line second-quarter results but lower margins and announced a deal to acquire Madison Research Corp. New estimates for the company are 2 cents per share on revenues of $355.1 million for 2006, down from EPS of 6 cents on revenues of $358.4 million. Credit Suisse First Boston lowered its price target on the company to $5 from $6 and adjusted its 2006 estimates to 18 cents on $456 million in revenues from 26 cents on $446 million in revenues

   

• Morgan Stanley raised its estimates on American Tower Corp. on what it called strong fundamentals after the company released select second-quarter financial results that exceeded expectations. RBC Capital Markets raised its estimates and price target on American Tower after the company reported solid second-quarter results. Its new price target is $38 and its new EPS estimate for 2006 is breakeven, up from predictions of a loss of 1 cent per share.

   

• Standard & Poor’s Rating Services placed its ratings on Crown Castle International Corp. on CreditWatch with negative implications due to an investigation by the Securities and Exchange Commission into the company’s historical stock-options practices. Meanwhile, RBC Capital Markets raised its estimates on the company based on its strong second-quarter results and continued positive site-leasing demand. RBC also raised its price target on Crown to $37 from $34.

   

• RBC Capital Markets lowered its fiscal 2007 estimates on Openwave Systems to 45 cents on $416 million in revenues from 47 cents on $422 million in revenues. The firm noted Openwave’s uncertain outlook. RW Baird lowered its 2007 EPS estimates on Openwave to 31 cents from 44 cents.