The following list includes ratings changes and financial information for wireless companies announced this week by investment-banking and financial-services firms.
Carriers
Standard & Poor’s Ratings Services raised its ratings on UbiquiTel Inc., including its corporate credit rating from CCC+ to B- and its senior unsecured debt rating from CCC to B-. The outlook is positive, and the company was removed from CreditWatch, where it was placed with positive implications in November because of strengthening operating and financial performance.
Standard & Poor’s Ratings Services assigned an A- rating to the $9.2 billion senior unsecured credit facility of Sprint Nextel Corp.
Standard & Poor’s Ratings Services revised its outlook on Alaska Communications Systems to stable from negative based on expectations for healthy growth in the wireless business and improving operating trends in the wireline segment.
Standard & Poor’s Ratings Services assigned a CCC rating to Centennial Communication Corp.‘s proposed $200 million senior notes due 2012 and $350 million senior floating-rate notes due 2012. The firm also raised the rating on the company’s $750 million secured bank loan to B from B- and the recovery rating was upgraded to 1 from 2. All the other ratings of Centennial and its related entities, including its B- corporate credit rating, were affirmed and removed from CreditWatch. The outlook is stable.
Standard & Poor’s Ratings Services revised its CreditWatch listing for Alltel Corp. to negative from developing following its announcement that it plans to spin off its wireline business. The action reflects the possible pressure on credit metrics caused by the divestiture of the wireline business without accompanying debt reduction and the possibility that Alltel’s wireless business risk profile may not support current ratings given that it competes with four national operators, said S&P. “The transaction, while de-leveraging, does not improve credit metrics sufficiently to support a corporate credit rating higher than the current ‘A’,” said Standard & Poor’s credit analyst Catherine Cosentino.
Infrastructure and handset vendors
RBC Capital Markets raised its estimates on Nokia Corp. on strong demand. First-quarter forecasts for revenue increased from 8 billion euros to 8.25 billion euros and its EPS forecast remains the same at 0.20 euros.
Goldman Sachs increased its fiscal first quarter 2006, fiscal year 2006 and fiscal year 2007 estimates on Qualcomm Inc. on the strength of handset ASPs as third-generation traction builds in Europe with UMTS and in the United States with EV-DO technology.
Other
Piper Jaffray raised its EPS estimates on Powerwave Technologies for 2006 from 73 cents on revenues of $1.07 billion to EPS of 75 cents on revenues of $1.1 billion. The increase was based on the firm’s more optimistic view of the 2006 infrastructure market.
Robert W. Baird raised its fiscal 2006 revenue estimates on ADC Telecommunications Inc. to $1.30 billion from $1.27 billion but lowered its EPS estimate to $1 from $1.04. The company reported in-line results for the fourth quarter with strength in fiber connectivity offset by declines in copper, enterprise and wireless.
First Albany Capital raised its fourth-quarter estimates on Tellabs Inc. due to higher estimated broadband data revenues. The firm said it does not believe Tellabs’ suspension of broadband deployments at Cable & Wireless will represent as significant an impact as it originally estimated. Consequently, First Albany added $10 million of revenue back into the company’s Broadband Data product line. Revenue estimates now are $490 million up from $480 million. It also raised 2006 revenue estimates to $2 billion from $1.97 billion based on the company’s positioning to capitalize in backhaul and backbone deployments for higher bandwidths.
Prudential Equity Group raised its 2006 revenue and EPS estimates on Lightbridge Inc. to $108 million and 29 cents per share from $100 million and 25 cents per share. Prudential raised its price target on Lightbridge to $8 from $6.
Avondale Partners raised its estimates on SpectraLink Corp. following its announcement that it plans to buy Kirk Telecom for $54.3 million. The firm raised its 2006 EPS estimates to 81 cents from 74 cents and its price target from $15 to $16. Avondale said it views the acquisition as positive and reiterated its market outperform rating.
Robert W. Baird lowered its rating on Jamdat Mobile Inc. to neutral from outperform based on limited upside to the announced $27 cash acquisition price by Electronic Arts. Baird said it would be surprised if a higher offer for the company was made.
Piper Jaffray lowered its estimates on Tekelec due to risk caused by deployment issues it has with Cingular. The lowered estimates reflect significantly lower contribution of switching revenues. Piper Jaffray lowered its price target on the company to $18 and lowered its fourth-quarter revenue and EPS estimates to $150 million and 18 cents per share from $154 million and 19 cents per share. Revenue estimates for 2006 fall from $649 million to $609 million and EPS estimates drop 12 cents to 75 cents per share. For 2007, Piper Jaffray projects revenues of $688 million and EPS of 92 cents.
