The following list includes ratings changes and financial information for wireless companies announced this week by investment-banking and financial-services firms.
Carriers
Prudential Equity Group lowered its price target and estimates on iPCS Inc. after the company reported first-quarter results, including revenue and ARPU results that fell below the firm’s expectations but EBITDA that beat Prudential’s forecasts. The firm lowered its price target on iPCS to $46 from $47 and lowered its fiscal 2007 EPS estimate on the company from $1.13 to $1.04.
RBC Capital Markets updated its estimates on Alltel Corp. after the company hosted an analyst meeting. RBC raised its 2006 revenue forecast from $10.8 billion to $11 billion and lowered its EPS estimate from $3.86 to $3.52. In addition, RBC raised its 2006 net wireless adds forecast by 5,000 to 440,000 customer additions. RBC rates Alltel at Outperform with a $70 price target.
Merrill Lynch downgraded its rating on SunCom Wireless from neutral to sell, saying it believes there is an increasing likelihood of the company restructuring in the intermediate term.
Handset and Infrastructure vendors
Lehman Brothers lowered its opinion on Palm Inc. from equal weight to underweight, saying demand for the company’s Treo product is rising but not at a pace consistent with consensus estimates.
Citigroup Research cut its rating on Nortel Networks from buy to hold and lowered its price target and estimates on the company. The downgrade reflects a variety of factors, including a weaker near-term demand environment, a significant draw down on the company’s book-to-bill and delays in the Flextronics transfer. Citigroup cut its price target on Nortel to $3.20 from $4. UBS lowered its estimates on Nortel for fiscal 2007 to 19 cents per share from 21 cents per share due to a shareholder settlement and changes in accounting. UBS also lowered its price target on the vendor to $3.25.
Other
Robert W. Baird upgraded its rating on Tekelec from neutral to outperform, saying fundamentals at the company remain intact and its new chief executive officer, Frank Plastina, is positive for the company. Baird also raised its price target on the company to $20 from $15.
CIBC World Markets lowered estimates on Alvarion after the company reported fourth-quarter results below expectations despite improvements in growth. New estimates for 2006 are a loss of 8 cents on revenue of $203.3 million, down from a return of 3 cents on revenue of $220.5 million. For 2007, EPS is expected to be 23 cents on revenue of $244.9 million, from EPS of 33 cents on revenue of $265.6 million.
CIBC World Markets raised its estimates on Brightpoint to reflect the company’s strong fourth-quarter performance. For 2006, it expects earnings of 88 cents per share on revenue of $2.4 billion, up from previous estimates of EPS of 77 cents on revenue of $2.3 billion. CIBC also introduced 2007 estimates of $2.6 billion and $1.11. CIBC further raised its split-adjusted price target on the company from $16 to $24.
First Albany lowered its estimates on CallWave Inc. after the company released fiscal second-quarter results that came in below the firm’s expectations and lowered guidance. First Albany lowered its EPS estimate for fiscal year 2006 from a return of 14 cents per share to a loss of 17 cents per share, while revenue estimates decrease from $41.5 million to $36.4 million.
Merrill Lynch raised its price targets on tower companies American Tower Corp. and SBA Communications on positive trends in the sector. American Tower’s price target moves to $36 from $29 and SBA’s moves to $25 from $19. Merrill Lynch maintained its neutral rating on Crown Castle. RBC Capital Markets also raised its outlook on the tower group. It raised its price targets on American Tower to $35, Crown Castle to $37 and SBA to $25. It maintained a $54 price target on Global Signal.
CIBC World Markets raised its estimates on Stratex Networks Inc. after the company beat revenue and EPS estimates and detailed a new relationship with Alcatel. For the March quarter, CIBC raised its estimates to 2 cents per share on revenues of $62.2 million from no earnings per share on revenues of $53.8 million. For fiscal 2007, the firm raised its estimates to 20 cents on revenues of $275.5 million from 14 cents on revenues of $239.4 million. CIBC also raised its price target on the company from $5 to $6.
