Nippon Telephone Outperforms

• By Zacks Equity Research
• On 2:27 pm EST, Tuesday November 10, 2009

Nippon Telegraph & Telephone Corp. (NYSE: NTT - News) declared better-than-expected second quarter of fiscal 2010 financial results. Quarterly total revenue of $26,630 million was an increase of 11.6% year-over-year. This was also better than the Zacks Consensus Estimate of $26,316 million. The improvement in revenue was mainly due to higher IP/Packet Communication services together with a favorable movement of foreign exchange rate. 

On a GAAP basis, net income in the quarter was $1,523 million or 58 cents per share compared to a net income of $2,143 million or 79 cents per share in the prior-year quarter. However, the EPS far exceeded the Zacks Consensus Estimate of 44 cents per share. Quarterly gross margin was 62% compared to 62.5% in the year-ago quarter. Selling, general, and administrative expenses in the quarter were $7,745 million compared to $6,656 million in the prior-year quarter. 

At the end of the reported quarter, Nippon had approximately $13,816 million of cash & marketable securities on its balance sheet compared to $12,003 million at the end of the prior-year quarter. Total debt was $48,537 million at the end of the quarter compared to $44,970 million at the end of the year-ago quarter. 

Nippon generated $8,167 million cash from operations during the quarter compared to $8,641 million in the prior-year quarter. Quarterly free cash flow (cash flow from operation less capital expenditure) was $4,672 million compared to $5,184 million in the year-ago quarter.

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