Nomura Securities on Large Cap U.S. Telecom: Q2 Reflections and Key Themes
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Rating Summary:
17 Buy, 35 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 9 | New: 24
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Nomura Securities on Large Cap U.S. Telecom: Q2 Reflections
Analyst, Mike McCormack, said, "Key themes from 2Q12 results are 1) Competition takes a break (Verizon (NYSE: VZ) and AT&T (NYSE: T) took nearly all net new subscribers, but the 2.4mn industry total for the quarter fell 30% year over year); 2) Record wireless EBITDA (On the back of lower competition, carriers posted record profitability); 3) Focus narrowing on 4Q (Carriers are gearing up for the next iPhone refresh and big marketing campaigns in late 3Q/early 4Q); 4) Better Wireline margins, revenue weak (Wireline profitability came in better than expected, but revenue was generally soft). Stockwise, for AT&T: We believe estimates are still too low for 4Q as the Street anticipates greater iPhone (Nasdaq: AAPL) margin dilution than we think is likely. For Verizon, the company continues to post stellar Wireless results, and we expect AT&T and Verizon stock returns to remain highly correlated. For Sprint (NYSE: S): We were encouraged by the operational improvements in both Wireless and Wireline during the quarter."
Analyst, Mike McCormack, said, "Key themes from 2Q12 results are 1) Competition takes a break (Verizon (NYSE: VZ) and AT&T (NYSE: T) took nearly all net new subscribers, but the 2.4mn industry total for the quarter fell 30% year over year); 2) Record wireless EBITDA (On the back of lower competition, carriers posted record profitability); 3) Focus narrowing on 4Q (Carriers are gearing up for the next iPhone refresh and big marketing campaigns in late 3Q/early 4Q); 4) Better Wireline margins, revenue weak (Wireline profitability came in better than expected, but revenue was generally soft). Stockwise, for AT&T: We believe estimates are still too low for 4Q as the Street anticipates greater iPhone (Nasdaq: AAPL) margin dilution than we think is likely. For Verizon, the company continues to post stellar Wireless results, and we expect AT&T and Verizon stock returns to remain highly correlated. For Sprint (NYSE: S): We were encouraged by the operational improvements in both Wireless and Wireline during the quarter."
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