Nomura Securities on Telecommunications: Q1 Model Book

Nomura Securities on Telecommunications: Q1 Model Book

Analyst, Mike McCormack, said, "This report is intended to serve as a summary for clients throughout the fourth-quarter earnings season. It contains a summary of model and company guidance commentary for covered companies. We have adjusted our estimates for CenturyLink (NYSE: CTL), Leap (Nasdaq: LEAP), MetroPCS (NYSE: PCS) and Windstream (NYSE: WIN)."

CenturyLink (Buy, PT $45): lowered our EBITDA margin forecast to 40.3% from 40.6%. EPS unchanged at $0.57. Sees FY12 EPS between $2.25-2.45 and revenues between $18.2-18.4 billion

Leap (Neutral, $10): Raising ARPU to $42.66 from $42.57, EBITDA estimate falls to $143m from $158m. Raising our cost of service expense by $5m to $273m on lower MNVO margins. Net our Adj. EBITDA estimate falls to $143m from $158m. Lowers Q1 loss from (0.91) to (1.14) and FY12 from (3.47) to (4.28)

MetroPCS (Neutral, PT $13): Lowered 1Q estimates for net additions to 369k from 412k, ARPU estimate flat Q/Q, versus up 0.8%, and raising our CPGA estimate from $184 to $191. Adj. EBITDA of $306m, down $31m vs. prior. Lowers Q1 EPS from $0.19 to $0.13 and FY12 from $0.95 to $0.84.

Windstream (Neutral, PT $12): We updated our model for the PAETEC acquisition. FY12/13 EPS estimate now $0.59/$0.71.

No Changes To Following:
AT&T (NYSE: T): Maintains a 'Buy' rating, PT $32.

Frontier Comm (NYSE: FTR): Maintains 'Buy' rating, PT $5.

Sprint Nextel (NYSE: S): Neutral, PT $2.50

Verizon (NYSE: VZ): Neutral, PT $37

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