The Zacks Analyst Blog Highlights: Verizon Communications, AT&T, China Mobile, Vodafone Group and SK Telecom
CHICAGO, Oct. 24, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Verizon Communications Inc. (NYSE:VZ-Free Report), AT&T Inc. (NYSE:T-Free Report), China Mobile Ltd. (NYSE:CHL-Free Report), Vodafone Group Plc. (Nasdaq:VOD-Free Report) and SK Telecom Co. Ltd. (NYSE:SKM-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Thursday's Analyst Blog:
Telecom Stock Roundup
In the last week, most of the major telecom stocks traded in the positive. This despite the fact that telecom behemoth Verizon Communications Inc. (NYSE:VZ-Free Report) and AT&T Inc. (NYSE:T-Free Report) failed to meet both the top and bottom line of the respective Zacks Consensus Estimate in the third quarter of 2014.
Chinese telecom giant China Mobile Ltd. (NYSE:CHL-Free Report) also reported weak financial results for the third-quarter of 2014. Nevertheless, the positive outcome is that all three large telecom operators continue to gain subscribers.
Meanwhile, Vodafone Group Plc. (Nasdaq:VOD-Free Report) is set to become the first wireless operator in the U.K. to offer LTE-A (Long-Term Evolution Advanced) service.
Recap of the Week's Most Important Stories
1. Verizon reported disappointing financial results for the third quarter of 2014. Lower-than-expected financial results were primarily due to higher cost of services and sales and higher interest expenses. Quarterly net income came in at $3,794 million or 89 cents per share compared with $5,578 million or 78 cents per share in the year-ago quarter.
However, earnings per share of 89 cents fell below the Zacks Consensus Estimate of 92 cents. Quarterly total revenue increased 4.3% year over year to $31,586 million but lagged the Zacks Consensus Estimate of $31,707 million. (Read More:Verizon (VZ) Misses on Q3 Earnings, Revenues.)
2. China Mobile, the largest wireless operator of China reported disappointing financial results for the third quarter of 2014. Both total revenue and net earnings declined year over year. Net profit dropped for the fifth successive quarter.
The dismal performance can be largely attributed to five reasons, including (1) slowing down of growth in the Chinese mobile market (2) higher expenses related to 4G TDD-LTE network rollout (3) increased customer retention costs (4) newly imposed value-added taxes and (5) intensifying competition. (Read More: China Mobile Q3 Earnings, Revenues Decline on Rising Costs.)
3. Vodafone, the largest wireless carrier in Europe has decided to install LTE-A (Long-Term Evolution Advanced) network in Birmingham, London and Manchester this month. The company will become the first wireless carrier in the U.K. to commercially offer LTE-A service. In Jun 2013, SK Telecom Co. Ltd. (NYSE:SKM-Free Report) of South Korea became the first wireless operator in the world to commercially launch LTE-A network using carrier aggregation. In Mar 2014, AT&T became the first wireless operator in the U.S. to launch LTE-A services in Chicago. (Read More:Vodafone Spearheads LTE Advanced Network Launch in U.K.)
4. AT&T is likely to witness strong momentum in both its Wireline and Wireless businesses. Continued strength in the smartphone business owing to the mobile share plan is driving the carrier's wireless business. With respect to the Wireline segment, management expects positive business trends to continue in the coming quarter driven by strong business revenues and enhanced strategic services.
However, the company faces several limitations in the wireless spectrum division. It recently received a restriction from the Federal Communications Commission regarding substantial airwave acquisitions in the upcoming auction. On the financial front, promotional costs associated with Project Velocity IP and Agile pose major impediments in the company's growth trajectory. (Read More: Will AT&T (T) Disappoint Earnings Estimates this Season?)
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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