Nomura Securities on U.S. Telecom: Updating Estimates for iPhone 5 Launch (T, VZ, & S)
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Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
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Nomura Securities on U.S. Telecom: Updating Estimates for iPhone 5 Launch
Analyst, Mike McCormack, said, "We are updating our wireless estimates for a late September launch of the new iPhone 5 (Nasdaq: AAPL), versus our previous estimates of a 4Q 12 launch. Broadly speaking, this shifts a significant cost burden into 3Q, which we estimate could correspond to 5mn iPhone sales across the industry. We would expect that 4Q will remain a strong unit quarter, given the timing of a possible late 3Q launch, as well as the holiday selling period. This leads to a net increase in 2H12 industry iPhone sales versus our prior estimates."
A&T& (NYSE: T) (Buy, TP $38): We believe consensus continues to price in far more margin dilution than likely from the iPhone launch. Reduced 2012E EPS from $2.49 to $2.47 vs. Street $2.41.
Verizon (NYSE: VZ) (Neutral, TP $45): The company is likely to continue to push its more cost-effective DROID line-up of phones, but will still see dilution from iPhone 5 sales. 2012E EPS from $2.49 to $2.46 vs the Street at $2.49.
Sprint (NYSE: S) (Neutral, TP $2.50): While a key feature of the iPhone 5 is expected to be LTE compatibility, and Sprint’s LTE network is limited in size, we expect a healthy portion of the subscriber base will want the phone. We lowered our 2012E EPS from a loss of ($1.53) to ($1.59) vs the Street ($1.66).
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Analyst, Mike McCormack, said, "We are updating our wireless estimates for a late September launch of the new iPhone 5 (Nasdaq: AAPL), versus our previous estimates of a 4Q 12 launch. Broadly speaking, this shifts a significant cost burden into 3Q, which we estimate could correspond to 5mn iPhone sales across the industry. We would expect that 4Q will remain a strong unit quarter, given the timing of a possible late 3Q launch, as well as the holiday selling period. This leads to a net increase in 2H12 industry iPhone sales versus our prior estimates."
A&T& (NYSE: T) (Buy, TP $38): We believe consensus continues to price in far more margin dilution than likely from the iPhone launch. Reduced 2012E EPS from $2.49 to $2.47 vs. Street $2.41.
Verizon (NYSE: VZ) (Neutral, TP $45): The company is likely to continue to push its more cost-effective DROID line-up of phones, but will still see dilution from iPhone 5 sales. 2012E EPS from $2.49 to $2.46 vs the Street at $2.49.
Sprint (NYSE: S) (Neutral, TP $2.50): While a key feature of the iPhone 5 is expected to be LTE compatibility, and Sprint’s LTE network is limited in size, we expect a healthy portion of the subscriber base will want the phone. We lowered our 2012E EPS from a loss of ($1.53) to ($1.59) vs the Street ($1.66).
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