Mobile TeleSystems (MBT), Eastern Europe’s largest cellular operator, announced results for third-quarter 2009 with earnings per ADS of $1.31 exceeding the Zacks Consensus Estimate of $1.17. Net income, however, dipped 4.1% year over year to $494.4 million on lower revenue and higher interest expenses on US dollar denominated debt.  Revenue, ARPU & Churn  Consolidated revenue declined 19.4% year over year to $2.27 billion, affected by the macroeconomic volatily across key markets and unfavorable exchange rate (rouble versus dollar) movements which hurt the company’s dollar-denominated revenues. On a geographic basis, revenue increased in Russia (7.2% year over year) and Turkmenistan (113.2%) while declining in Ukraine (1.7%), Uzbekistan (1.9%)and Armenia (3.1%).   In Russia , churn (customer switch) increased sequentially and year over year while ARPU (average revenue per user) increased from the previous quarter but declined year over year. Churn at Ukraine declined year over year while increasing ...

For Immediate Release

Chicago, IL – October 21, 2009 – 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: Nucor (NUE), Dow Chemical (DOW), Freeport McMoran (FCX), Mobile TeleSystems (MBT) and VimpelCom (VIP).

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Here are highlights from Tuesday’s AnalystBlog:

Inflation? What Inflation?

On a year-over-year basis, Crude goods are down 31.5%. However, the year-over-year numbers at the Intermediate -- and especially the Crude -- levels are going to show much slower declines in the next few months.

In October of last year, Intermediate goods prices fell 4.2% while prices fo Crude

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Russia’s incumbent telecom carrier Mobile TeleSystems (MBT) released its 2009 outlook yesterday. The company has lifted its capital expenditure (CapEx) guidance to $1.8 billion from $1.5 billion as per the previous guidance.   This increase is primarily due to the expected growth in capital spending in Central Asian markets and appreciation of the ruble against the US dollar. While the revised CapEx for 2009 is lower than $2.2 billion spent in 2008, as a percentage of sales it still remains at 22%. In contrast, the company’s archrival VimpelCom (VIP) is expected to spend 12%-15% of sales in 2009.   Mobile TeleSystems plans to invest approximately $450 million in 2009 in 3G network infrastructure and expansion of its proprietary distribution network. Moreover, the company has earmarked $350 million for the maintenance of its existing network. To fund its investments in 3G network, the company has secured a loan ...

Mobile TeleSystems (MBT) announced results for the second quarter with reported earnings of $1.49 per ADR beating the Zacks Consensus Estimate of 85 cents. Eastern Europe’s largest cellular operator reported revenue of $2 billion, down 23.3% year over year, hurt by the macroeconomic volatility across its markets. Net income dipped 14.6% from the year-ago quarter to $563 million on lower revenue, higher interest expenses and increased handset costs.

On a geographic basis, revenue rose 7% year over year in Russia, 4% in Uzbekistan, 35% in Turkmenistan and 3% in Armenia, while sales declined 8% in Ukraine.

Mobile TeleSystems added approximately 2.8 million customers in the quarter (up sequentially), primarily driven by a 2.3 million net subscriber growth in Russia. This was marginally offset by 155,000 subscriber losses in Ukraine. At the end of the second quarter, the company served approximately 99.5 million subscribers (67.4 million in Russia), up

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The second-largest cellular carrier in Russia, VimpelCom (VIP), announced the commercial launch of its wireless operation in Vietnam under its Beeline brand. The company will initially roll out services in Hanoi, Ho Chi Minh City and Danang, covering a population of over 15 million. This follows the launch of the company's mobile operation in Cambodia in May 2009.

In July 2008, VimpelCom signed a definitive agreement to establish GTEL-Mobile, a mobile telecom joint-venture company for constructing GSM-based wireless networks in Vietnam. The other parties in this joint-venture pact are Global Telecommunications Corporation, a state-owned enterprise, and GTEL TSC, a subsidiary of GTEL.

Under the deal terms, VimpelCom has acquired 40% interest in GTEL-Mobile with GTEL and GTEL TSC retaining 51% and 9% stake, respectively. In early 2009, VimpelCom obtained a license from the Vietnamese government to build and operate a GSM cellular network under the joint-venture.

VimpelCom remains the second-largest wireless

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According to a Reuters poll, analysts have suggested that GDP will drop by 4.7% this year and growth is unlikely to return by the end of the year.  Dmitry Medvedev has pledged to increase social spending in some areas in the 2010-2011 budget.  The Russian Deputy Prime Minister Dmitry Kozak has said that in order to support the construction industry, 12,000 apartments have been bought to house 35,000 citizens.  Rusal chairman Viktor Vekselberg has said that as part of its debt restructuring, Vneshekonombank may sell bonds convertible to stock in Rusal and Rusal may sell its $4 billion 25% stake in Norilsk Nickel.  Norilsk Nickel is looking to change the terms of debt repayments linked to the 2007 takeover of Canada's LionOre.  Communications provider Mobile TeleSystems plans to storm Russia with web connections and services hoping to ...

The financial crisis is making itself felt in job losses. The Kremlin is trying to limit the amount of foreign debt taken on by its oligarchs in an attempt to prevent Russian companies from ending up in foreign hands. United Company RusAl will receive a massive $4.5 billion bailout fund - almost half of the total loans allocated - from state-run Vneshekonombank, to help it refinance a Western loan. The UK’s Business Secretary, Peter Mandelson, spoke highly of Russia’s financial prospects as he reached the end of his visit to Moscow, saying that the crisis had boosted diplomatic relations between the two countries. A share buyback for Norilsk Nickel was so oversubscribed that shareholders will only be able to sell 7% of the shares tendered - provided the court injunction to freeze them is lifted. The UK’s Vodafone ...

Vimpel-Communications (VIP) delivered better-than-expected operating results in the most recent quarter, beating our estimates with strong revenue and customer growth across all its markets.

We continue to be intrigued by VimpelComÂ’s success in increasing sales and retaining new subscribers on a recurring basis and maintaining strong operating margin. We believe synergies from the Golden Telecom acquisition will continue to drive revenue and earnings momentum. Additionally, untapped opportunities in Eastern European markets, coupled with fresh expansion initiatives in Southeast Asia, support our forecast for strengthening financials.

We reiterate our Buy rating based on financial metric estimates which we believe are attainable. VimpelCom is trading at 10.2x our 2008 EPADS estimates which is significantly below historical levels in previous quarters, although this metric remains at a premium to its major competitor, Mobile TeleSystems (MBT) (its closest Russian peer). VimpelComÂ’s shares have lost approximately 50% of its value since a 52-week high

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