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The Zacks Analyst Blog Highlights: Sprint Nextel, Verzion Communications, AT&T, Comcast and Time Warner Cable


For Immediate Release

Chicago, IL – September 21, 2012 – 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 Sprint Nextel Corp. (S), Verzion Communications Inc. (VZ), AT&T Inc. (T), Comcast Corporation (CMCSA) and Time Warner Cable Inc. (TWC).

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Here are highlights from Thursday’s Analyst Blog:

 

Sprint Sells 1 Million LTE Phones

 

The third-largest U.S. wireless carrier Sprint Nextel Corp. (S) announced that it sold 1 million of smartphones that support Long Term Evolution (:LTE) technology. About 90% of the sales came from HTC Corp’s Evo and Samsung Electronics’ Galaxy S III phone.

Both the EVO and Galaxy S III phones are gaining increased traction in the U.S. market since their launch in May and July, respectively. In addition to these two phones, Sprint also offers three more 4G LTE smartphones - Galaxy Nexus, LG Viper 4G LTE and   Samsung Galaxy S3. Further, the company expects to introduce Motorola Photon Q 4G LTE in the near future. We believe this strong line-up of handsets will add new customers while retaining the old; and lead to increased subscriber growth, reduced churn and higher average revenue per user.

Sprint is in the process of expanding its high-speed LTE networks in 100 additional cities in the coming months. It made its LTE debut in five major markets – Atlanta, Dallas, Houston, Kansas City and San Antonio – in mid-July. The company expects to complete nationwide deployment by the end of 2013. The LTE coverage is expected to reach more than 120 million people (or roughly half of its CDMA footprint) by the year-end and 250 million by next year.

The LTE expansion is the part of the multi-billion dollar restructuring program known as the ‘Network Vision’, which aims to combine 3G and 4G technologies into one seamless network. The plan is expected to generate $10 billion to $11 billion in savings over a seven-year period (2011–2017). The company expects the Network Vision deployment to be completed by the end of 2013.

These expansions will strengthen Sprint’s competitive position over the two major rivals- Verzion Communications Inc. (VZ) and AT&T Inc. (T).

We are maintaining our long-term Neutral recommendation on Sprint with Zacks #3 (Hold) Rank.

 

 

Comcast to Rollout High-Speed Plan

 

Comcast Corporation (CMCSA) – the largest cable MSO in the U.S. has decided to introduce a usage-based residential broadband plan in Tuscon, Arizona whose internet speed will vary according to plans.

According to Comcast, the fastest plan will have a download/upload speed of 105/20 MB and will have a maximum limit of 600GB per month while the other plan will carry a download speed of 50MB/sec with a monthly data threshold of 450GB. Customers will be charged $10 for every additional bucket of 50GB usage but will not be billed for the first three times they exceed the monthly allowances during a 12-month period.    

All other plans will have a monthly data ceiling of 300GB after which the overage charges will be applicable and the company will remind its customers via email and web browser notices when their usage limit reaches ninety percent of completion. Comcast is also offering a plan with a download/upload speed of 305/65 MB/sec targeting the high-end customers, but hasn’t yet launched it in Tuscon.

Tuscon is the second market where Comcast is launching this service after it has launched a similar 300GB plan in Nashville scrapping the older 250GB plan where the customers were not charged with overage fees but their services stop functioning after the said limit.

We believe Comcast is launching this service to keep the shortage of bandwidth problem within check as the overage fees will force customers to restrict their usage within the cap limit. However, the company faces competition from the likes of Time Warner Cable Inc. (TWC), who has already deployed similar plans in certain areas.  

The current Zacks Consensus Estimate for Comcast Corporation. is pegged at 46 cents for the third quarter of 2012 with a growth rate estimate of 40.00%. For 2012, the Zacks Consensus Estimate stands at $1.93 with a growth rate of 21.88% while for 2013, the Zacks Consensus Estimate stands at $2.23 with a growth rate of 15.92%.

Recommendation:

We retain our long-term Neutral recommendation on Comcast Corp. Currently, it has a Zacks #2 Rank, implying a short-term Buy rating.

 

 

 

 

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