Chicago, IL – November 23, 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: China Mobile (CHL), Alcatel-Lucent (ALU), China Unicom (CHU), China Telecom (CHA) and Vodafone (VOD).

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Here are highlights from Friday’s Analyst Blog:

China Mobile Outlines 4G Plan

China Mobile (CHL), the world’s largest wireless carrier by subscriber, has revealed its plan to commence the trial run of its 4G network during World Expo 2010 to be held in Shanghai from May 1 to Oct 31, 2010. The company’s 4G service is based on the TD-LTE (Time Division Duplex Long Term Evolution) mobile broadband technology. Roughly 200 participants and 70 million visitors are expected to assemble at the Expo.

China Mobile has recently selected Alcatel-Lucent (ALU) for the responsibilities of design, construction, installation and integration of communication infrastructure to facilitate the 4G network trial. The TD-LTE network will provide advanced wireless services (including high-definition TV and ultra-fast broadband Internet access) to the visitors at the exposition.

The three major Chinese telecom operators China Mobile, China Unicom (CHU) and China Telecom (CHA) are investing heavily in Shanghai to improve the city’s network infrastructure, thereby ensuring the delivery of smooth network coverage for Word Expo 2010. China Mobile plans to invest RMB 15 billion ($2.19 billion) over the next three years in Shanghai.

China Mobile’s TD-LTE venture is being supported by the British telecom giant Vodafone (VOD).

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Chicago, IL – November 12, 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: Vodafone Group Plc (VOD), Telefonica (TEF), Deutsche Telekom (DT), France Telecom (FTE) and Verizon (VZ).

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Here are highlights from Wednesday’s Analyst Blog:

Vodafone Profit Leaps, Lifts Savings

Vodafone Group Plc (VOD), the largest wireless carrier in the world by revenue, has announced interim results for fiscal year 2010 with adjusted net income of £4.58 billion (US$7.3 billion) increasing 15% year over year from £3.99 billion (US$6.4 billion) reported a year ago, driven by favorable exchange rate movements and reduced tax. Adjusted earnings exclude one-time items such as impairment losses.

The telecom giant reported consolidated revenues of £21.8 billion (US$34.8 billion) for the period, representing a 9.3% year over year growth. Favorable exchange rate (euro-sterling) swings and net impact of merger and acquisition initiatives contributed to this growth. Excluding these impacts (organic basis), revenue declined 3% year over year.

Group service revenue declined 2.6% year over year on an organic basis to £20.5 billion (US$32.7 billion), primarily due to weaker contributions from European markets as recessionary conditions curbed demand for wireless services. Adjusted EBITDA increased 2.9% year over year to £7.5 billion (US$12 billion) driven by cost control.

Revenues for the European segment increased 3% year over year (down 5.1% on organic basis) to £14.9 billion (US$23.8 billion). Service revenue in Europe declined 4.5% organically as growth in Italy and the Netherlands was more than offset by decreases across Spain, Germany and the UK due to a weaker economy, regulatory pressure and intense competition.

Decline in voice revenue continues to offset growth in data. Revenue in Germany and the UK remains under pressure due to mobile termination rate (inter-operator fees) cuts. Vodafone is also losing customers in the UK as subscribers switch to its major rival Telefonica’s (TEF) O2 which is marketing iPhone in the UK.

Moreover, Deutsche Telekom (DT) and France Telecom (FTE) have recently finalized an agreement to combine their UK units, which will create the largest mobile carrier in the UK.

This segment posted revenues of £3.7 billion (US$5.9 billion), up 36% year over year. Organically, service revenue fell 3.2% as consistent growth at Vodacom (South Africa) and increase in subscriber count were partly offset by weak contributions from Romania and Turkey. Service revenue at Vodacom increased 4.2% on an organic basis as a result of healthy subscriber accretion.

Asia Pacific & Middle East segment continues to perform in line with expectation. Revenue surged 15.9% year over year (11.3% organically) to £3.1 billion (US$4.9 billion), driven by continued strong growth in India , the single biggest contributor to organic revenue growth. Service revenue in India increased 20.5% organically boosted by roughly 55% growth in wireless customer base amid intense price competition.

During the six-month period, Vodafone registered roughly 20.6 million net new mobile connections across its operations, bringing the total subscriber base to 323.3 million (83.5% represented by prepaid). India continues to be a key driver for subscriber growth with a net addition of 14 million customers in the first six months of fiscal 2010.

In Europe, the company registered a net loss of 262,000 subscribers during the half-year period. Verizon’s (VZ) mobile unit, Verizon Wireless, in which Vodafone holds a 45% stake, however, posted a net addition of 1.1 million customers.

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Chicago, IL – October 13, 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: AT&T (T), Sprint Nextel (S), Deutsche Telecom (DT), MetroPCS (PCS) and Leap Wireless (LEAP).

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Here are highlights from Monday’s Analyst Blog:

AT&T Unveils Pre-Paid Plan

AT&T (T) has introduced a new unlimited monthly calling plan for the prepaid wireless market. Starting today, customers subscribing to the company prepaid wireless services receive unlimited voice calls, instant messaging as well as text, picture and video messaging for just $60 a month. However, the plan does not cover iPhone users.

Apart from the U.S., the new unlimited plan covers Mexico, Canada and over 100 countries worldwide. Roaming within the U.S. is free of cost. This prepaid rate plan is about 50% lower than the company’s regular postpaid unlimited (voice and text) service plan.

AT&T offers its prepaid services under the "GoPhone" brand, which does not require the customer to sign long-term contracts and keep a minimum deposit. While the company remains a dominant player in the postpaid market (representing 86% of the company’s total net customer additions), it is struggling to retain customers in the prepaid segment due to more attractive service plans offered by its competition.

The U.S. prepaid unlimited market is characterized by intense price competition as the incumbent players battle to win new customers while retaining the existing accounts. The rationale behind AT&T’s latest move is to respond to the aggressive price plans of its major competitors in this segment.

Sprint Nextel (S) is currently enjoying meaningful traction for its $50 per month unlimited plan (voice, text, data), which was launched in early 2009 by the company’s Boost Mobile prepaid subsidiary. Smaller wireless carriers, such as Deutsche Telecom’s (DT) T-Mobile USA, MetroPCS (PCS) and Leap Wireless (LEAP) are also offering unlimited voice and data plans at cost-effective price points.

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Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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Chicago, IL – August 10, 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: American Tower Corp. (AMT), Crown Castle International (CCI), Tata Teleservices (TCL), Vodafone Plc (VOD) and Medtronic Inc. (MDT).

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Here are highlights from Friday’s Analyst Blog:

U.S. Tower Giants India-Bound

Recently, American Tower Corp. (AMT) acquired XCEL Telecom Pvt Ltd., a mobile tower operator in India. XCEL owns 1,667 towers and has another 70 towers in various stages of development. The acquisition increases the total number of American Tower controlled wireless tower sights to over 26,000. Previous to this acquisition, American Tower had entered a build-to-suit agreement with a Tier1 wireless carrier in India to construct 200 tower sites.

Crown Castle International (CCI) is currently in negotiations with two Indian tower operators, Aster Infrastructure and Independent Mobile Infrastructure Ltd. Aster is holding simultaneous negotiation with American Tower.

After China, India is the second largest growth market for wireless services where the subscriber base is expected to be 737 million by 2012. This provides a significant revenue opportunity for the U.S. tower operators. At the same time, operations in India will be low-cost for these companies, which will boost their respective bottom line.

In addition to the U.S. companies, existing major tower operators in India are also trying to merge with small players to achieve the required economies of scale to compete with global giants. Tata-Quippo, a joint venture between Tata Teleservices (TCL) and Quippo Telecom Infrastructure Ltd., Indus Towers, a joint venture between Vodafone Plc (VOD), Bharti Airtel and Idea cellular, and Reliance Telecom Infrastructure are moving aggressively to increase their size of operations.

Medtronic Wins Settlement

Medtronic Inc. (MDT) won $57 million in settlement from AGA Medical Corp. after the federal U.S. district court jury in San Francisco ruled in its favor. AGA had infringed upon two U.S. patents owned by Medtronic through the use and sale of Amplatzer Occluder and vascular plug products. Medtronic will also receive 11% in royalties from future sales of these products by AGA through 2018.

The two patents in question are U.S. Patent Nos. 6,306,141 and 5,067,957, commonly known as the Jervis patents. These patents involve technologies that require the use of metal alloys to facilitate the working of doctors in different surgical operations. Medtronic has patents for these technologies.

The new ruling is a shot in the arm for Medtronic. The additional revenue generated from this settlement will take care of the company’s bottom-line. Medtronic is a leading global medical technology company specializing in implantable and interventional therapy devices and products. The company’s deep product pipeline and strong R&D program position it well for long-term organic growth, rather than having it rely purely on acquisitions.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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After China, India is the second largest growth market for wireless services where the subscriber base is expected to be 737 million by 2012. This provides a significant revenue opportunity for the U.S. tower operators. At the same time, operations in India will be low-cost for these companies, which will boost their respective bottom line.
 
In addition to the U.S. companies, existing major tower operators in India are also trying to merge with small players to achieve the required economies of scale to compete with global giants. Tata-Quippo, a joint venture between Tata Teleservices (TCL) and Quippo Telecom Infrastructure Ltd., Indus Towers, a joint venture between Vodafone Plc (VOD), Bharti Airtel and Idea cellular, and Reliance Telecom Infrastructure are moving aggressively to increase their size of operations.

Chicago, IL – August 4, 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: AT&T Inc. (T), NTT DoCoMo (DCM), Vodafone (VOD), Telefonica (TEF) and SK Telecom (SKM).

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Here are highlights from Monday’s Analyst Blog:

AT&T Leads Global HSPA Market

AT&T Inc. (T) has reportedly emerged as the leading player in the global HSPA (high-speed packet access) market in terms of total subscriber connections. According to a recent report by the GSM Association, the second-largest US carrier has outpaced industry leaders such as NTT DoCoMo (DCM), Vodafone (VOD), Telefonica (TEF) and SK Telecom (SKM) in terms of HSPA penetration.

HSPA is a mobile telephony standard widely used in 3G wireless networks to boost end-user experience by offering peak download speed of up to 14 megabits per second. According to the industry estimate, the global HSPA customer base is approaching the 150 million mark with around 230 operators having already deployed HSPA services and amassed 131 million subscribers (based on recent statistics).

AT&T currently has 28.6 million HSPA customer connections, which equates to 21% share of the worldwide HSPA subscription. This is significantly higher, compared to SK Telecom’s customer base of 12.4 million, NTT DoCoMo’s 5.1 million, Telefonica O2’s 2.3 million and Vodafone UK’s 2.1 million.

Since launching its wireless services on HSPA in 2005, AT&T has been able to outpace its Asian and European peers in terms of market penetration. Currently, almost 100% of the company’s 3G customers are on the HSPA platform. This is compared to the other major players in the HSPA market such as NTT DoCoMo, which currently has most of its 3G customers on the W-CDMA platform, a 3G wireless technology having slower network speeds than HSPA.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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On a positive note, revenue of $423.4 million (up 7.5% year over year) exceeded both the consensus view and our estimates. Segment wise, Rental & Management revenue was about $406.8 million, up 5.8% year over year. Sales from the Network Development Services segment approximated $16.6 million, up 76.6% over the prior-year quarter.

During the quarter, the company generated approximately $203.6 million of cash from operations while capital expenditure was $64.2 million. American Tower spent $92.1 million on acquisitions and $35.8 million for construction of new communication sites during the period. It built 212 communication sites in the quarter and acquired 230 sites in Brazil.

The company also reiterated its full-year guidance. Revenue from the Rental & Management segment is expected to range between $1,640 million and $1,665 million. Gross margin for this segment is projected at about $1,277 million - $1,297 million. Revenue for the Network Development & Services segment is estimated in the range of $35 million - $50 million with a projected gross margin of $15 million - $21 million.

American Tower continues to expect adjusted EBITDA of $1,161 million - $1,185 million. Income from continuing operations is projected in the range of $235 million - $247 million with cash flow from operations of $838 million - $878 million. The company has revised its capital expenditure guidance to range between $220 million and $255 million.

Moving forward, we believe the company’s foray into emerging markets represents a key growth catalyst. Recently, American Tower acquired XCEL Telecom Pvt. Ltd., a major wireless tower operator in India. After China, India is the second-largest growth market for wireless services where subscriber base is projected to reach 737 million by 2012. The acquisition offers significant revenue opportunity for American Tower and increases the total number of wireless tower sites controlled by the company to over 26,000.

In our opinion, American Tower’s near-term operating performance will be driven by substantial demand for tower space to facilitate high-speed wireless data services and mobile video, along with emerging 3G/4G technologies.

The company currently commands the second-largest position in the wireless tower market and maintains one of the strongest EBITDA margins in the industry. EBITDA margin for the most recent quarter was 68%, well above its peers Crown Castle International (CCI) and SBA Communications Corp. (SBAC).

The company is progressing well with healthy free cash flow which reached approximately $139.4 million in the second quarter, driven by stable operating costs. With the tower industry moving forward, operating cash flow is likely to accelerate. This is reflected in management’s 11% year-over-year growth projection for 2009. American Tower also has sufficient liquidity with no major debt obligation maturing within the next three years.

Our long-term views regarding the wireless tower industry remain bullish and we thus maintain our Buy recommendation for American Tower.

Chicago, IL – July 22, 2009 – Zacks Equity Research highlights VimpelCom (VIP) as the Bull of the Day and Regis Corp. (RGS ) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Merck (MRK), GlaxoSmithKline (GSK) and Wyeth (WYE).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676

Here is a synopsis of all five stocks:

Bull of the Day:

VimpelCom (VIP) is the second largest cellular carrier in Russia with over 25% market share and continued expansion in regions of the Commonwealth of Independent States (CIS), operating GSMbased wireless services.

We are encouraged with VimpelCom's successful sales growth trend and the company's ability to retain subscribers on a recurring basis, even as overall economic factors remain weak.

Additionally, the ongoing expansion initiatives into emerging Asian markets are expected to boost opportunity in wireless. We reiterate our Buy rating while we account for global economic factors, ongoing geopolitical events in Russia (surrounding countries) and weaker local exchange rates against the U.S. dollar which may affect near-term earnings.

Bear of the Day:

We maintain our Sell rating on shares of Regis Corp. (RGS ).

The offerings of common stock and convertible notes will likely strengthen the company's balance sheet and provide management with additional flexibility to withstand the economic recession.

However, these capital raises also significantly dilute current shareholders, and we note that the company's operating environment remains weak. As such, we maintain our Sell rating on the shares at this time.

Latest Posts on the Zacks Analyst Blog:

Merck & Glaxo May See a Boost

Recently, the World Health Organization (WHO) recommended the inclusion of oral rotavirus vaccines in all national immunization programs. This recommendation is likely to boost the sales of Merck’s (MRK) RotaTeq and GlaxoSmithKline’s (GSK) Rotarix vaccines. RotaTeq (approved in US in 2006) and Rotarix (2008 approved) recorded sales of $665 million and $268 million, respectively, last year.

According to the WHO, the infection caused by rotavirus (diarrhea) kills an estimated 1,600 children under the age of 5 every day, mostly in Africa and Asia. International agencies like WHO, UNICEF and GAVI (the Global Alliance for Vaccines and Immunization, a WHO partner) are working towards fighting rotavirus diarrhea and pneumonia together. These two diseases account for more than 35% of child deaths every year, especially in the less developed countries. The effort to tackle pneumonia paves the way for higher sales of Wyeth’s (WYE) Prevnar.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5508.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5509.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
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312-265-9380
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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 operator in Russia with over 25% market share. Nevertheless, the company has a higher projected growth rate than its nearest competitor, Mobile Telesystems (MBT) as it continues to demonstrate the ability to succeed in emerging markets bolstered by sustained subscriber growth. Besides maintaining its strong market position in the rapidly-maturing Moscow metropolitan area, VimpelCom has instituted expansion activities in regions outside of Russia. As part of this strategy, the company is currently exploring business opportunities in relatively under-penetrated incipient markets in Southeast Asia.

Being one of the fastest-growing economies (GDP growth of 6.2% in 2008) in Southeast Asia, Vietnam represents a significant growth prospect for VimpelCom with approximately 58% penetration in mobile telephony. The company will invest approximately $1 billion in the country over the next several years for the development of GSM-based wireless services. The GTEL-Mobile joint venture plans to cover over 40 provinces of Vietnam by the end of 2009, addressing a population of 41 million, translating into 48% penetration of the country's population.

We expect acquisitions and expansion opportunities in emerging markets to foster much of the company's growth moving forward. Consequently, we maintain our Buy rating for VimpelCom.

Since 2004, the company has spent RMB19.5 billion (US$3 billion) to extend its network coverage into the remote villages of the country.

The largest mobile carrier in the world by subscribers has signed a pact with the country's Ministry of Agriculture to include more than 10,000 villages annually under its network coverage, enabling people in these regions to access the company's wireless services by 2012. This will translate into 98% coverage of China's rural areas by the end of the 3-year term.

Additionally, China Mobile will also promote its indigenously developed 3G technology-based services in these covered territories.

China Mobile's leadership position in the global wireless market is supported by a consistently healthy Chinese economy, increased consumer purchasing power and relatively low wireless penetration (approximately 46% at the end of 2008) in China. However, saturation of the lucrative urban markets in the eastern part of the country has shifted the company's focus to rural markets, considered less affluent market regions of China with below 20% wireless penetration.

China Mobile commanded an 88% share of the net new customer additions in 2008; half of which were derived from rural market areas.

Expansion into rural markets remains one of the higher priorities for China Mobile as the company faces a more intense competitive landscape due to the recent overhaul of the Chinese telecom industry and distribution of 3G licenses by the government.

The company's peers, China Unicom (CHU) and China Telecom (CHA), are currently aggressively pursuing nationwide deployment of their respective 3G services. As such, China Mobile is using the rural expansion strategy as a defense mechanism to protect its subscriber base.

We assess that successful expansion into low-penetration rural regions of China, coupled with 3G service deployments through 2009 and customized mobile value-added services, establish China Mobile as the dominant mobile service provider; far ahead of its nearest competitors.

Consequently, we maintain our Buy recommendation for China Mobile.

Chicago, IL – July 14, 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: America Movil (AMX), Apple Inc (AAPL), Telefonica (TEF), Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX).

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Here are highlights from Monday’s Analyst Blog:

America Movil Battles Movistar

America Movil (AMX), the leading provider of wireless services in Latin America, has announced its plan to launch the highly anticipated iPhone 3GS, an upgraded version of Apple Inc’s (AAPL) iPhone 3G, in six countries across central and south America by July 31, 2009. The company will initially commercialize the new device in Mexico, Columbia, Guatemala, El Salvador, Uruguay and the Dominican Republic, which will be followed by expansion to other markets under its coverage universe.

The latest iPhone model offers superior features and functionality compared to the iPhone 3G, including faster processor speed, improved battery life and a better camera.

Through its largest subsidiary Telcel, America Movil currently dominates the Mexican wireless market facilitated by its well-known brand, extensive distribution network, nationwide coverage and the country’s benign regulatory environment. The company’s share of the Mexican wireless market was nearly 71% in 2008, with 65% wireless penetration.

America Movil launched its 3G services in Mexico in February 2008 and became the first and only carrier to adopt these 3G offerings. Leveraging its 3G network, the company launched iPhone 3G in Mexico in July 2008, followed by subsequent roll-outs in 10 additional Latin American markets.

Although America Movil still commands a major share of the Mexican wireless market, it is gradually losing its position due to stiff competition from Telefonica’s (TEF) Movistar, which has recently completed commercial launch of its 3.5G wireless network across several Mexican cities -- representing a major network advancement.

Additionally, introduction of mobile number portability (subscribers can switch operators without losing their phone numbers) in July 2008 has increased subscriber churn (customers switching to competitors) as more are more customers are migrating to Movistar. Further, America Movil remains significantly challenged by the intensely competitive Brazilian wireless market.

The upcoming launch of the iPhone 3GS is expected to help America Movil to counter competition in a more effective manner. The high-profile handset will essentially boost customer adoptions of the company’s 3G services, thereby stimulating ARPU (average revenue per user) growth while reducing subscriber churn.

We reiterate our Hold rating for America Movil as investment risks across key markets, regulatory issues and weak inflationary/currency conditions may limit the company’s financial performance in the upcoming reporting periods.

Exxon Wins New Drilling Permit

On Friday, July 10, Exxon Mobil Corp. (XOM), the world’s largest publicly traded oil company, gained a permit from Norway’s top petroleum resources regulatory agency, the Norwegian Petroleum Directorate (NPD), to drill wellbore 25/8-17 in production license 027 D.

The Texas-based oil giant plans to drill wildcat wells (well drilled in an area where no current oil or gas production exists) on the license using semi-submersible facility Bredford Dolphin. Exxon Mobil has a 50% operated interest in the production license 027 D, which was awarded in December 2007. Well 25/8-17 is located just south of the company’s Jotun field project in North Sea and is the second well drilled on the production license.

One of the largest oil and gas producers on the Norwegian continental shelf, Exxon’s recent award demonstrates its global approach to the identification and pursuit of quality hydrocarbon resources and exploration opportunities.

We currently have a Buy recommendation on this large-cap integrated player. Exxon Mobil’s relatively low-risk energy conglomerate business structure, its fortress balance sheets, ample free cash flow even in a low price environment and growing dividends are well suited for uncertain times like these. Our other Buy-rated name in this space is Chevron Corp. (CVX).

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Although terms of the deal were not disclosed, Sprint will offer a broad range of voice and data services, including mobile integration and international long-distance, mobile broadband, wireless WAN (Wide Area Network) and land mobile radio. The company will also provide more than 1,100 devices to facilitate smooth delivery of these integrated services.

The Pinnacle deal is expected to yield a substantial revenue stream for Sprint’s converged (wireless and wireline) business solutions. The company will leverage its newly established Business Markets Group (BMG) operating unit to offer these services to Pinnacle Airlines.

BMG delivers large assortment business applications to enterprises and government customers, based on 3G mobile broadband technology and industry leading push-to-talk wireless network. The unit contributed significantly to Sprint’s operating results in the first quarter of 2009 with the wireless and wireless services offered to business customers generating approximately $4 billion in revenue.

Sprint remains significantly challenged by the dismal economic environment that has forced consumers to curtail spending on wireless services, leading to the precipitous decline in subscriber base and associated revenues. The company continues to lose a significant number of postpaid wireless subscribers (lost 1.25 million customers in the last quarter, its highest quarterly loss ever) while its two head-to-head competitors, Verizon (VZ) and AT&T (T), have consistently registered healthy customer growth and gained market share.

Sprint continues to experience integration problems associated with its iDEN technology-based network which is not quite state-of-the-art compared to the technology platforms used by its rivals.

Moving forward, business and government customers represent the key for a potential turnaround for Sprint driven by the high value contract wins (like Pinnacle) at BMG. We continue our Hold recommendation for Sprint Nextel. 

Through its subsidiary Telecom Italia Mobile, Telecom Italia is the leading supplier of wireless services in Italy with 34.2 million subscribers. The company also has more than 36.1 million international wireless customers, with a major presence in Latin America (especially Brazil). However, subscriber growth has decelerated in the most recent quarter and the company is gradually losing market share to its rivals, including Vodafone (VOD).

Wireless operators across the globe are increasingly converging on network sharing that offers meaningful operating and cost-saving synergies. Telecom Italia is currently focusing on aggressive cost cutting to offset pressure on its topline, primarily due to lower revenue from its European broadband and domestic mobile business segments. The company is rationalizing and streamlining its organizational infrastructure and networks, a move that is expected to yield approximately €1.2 billion ($1.9 billion) in cost savings though 2010.

The network sharing deal with 3 Italia will benefit Telecom Italia on several fronts. In addition to improving network efficiency in both urban and rural regions, the agreement will truncate network costs by 30% (especially site leasing expenses) for each operator and reduce time for future network infrastructure developments.

We maintain our Hold recommendation for Telecom Italia as we envision that operating results through 2009 will be restricted by its exposure to a highly saturated domestic market, recessionary conditions, regulatory pressure on wireless business and increased competition across overseas markets.

Shaw Communications (SJR) on Friday June 26, 2009, delivered another strong quarter of earnings amid a grim economic environment. The company's third-quarter result was marked by strong subscriber growth with a rise in digital penetration. Digital penetration among basic subscribers is now 52.0% compared to 40.2% at August 31, 2008.

Shaw's ongoing capital investments have helped it to expand its areas of operations to include digital programming, Internet, Video-on-Demand (VOD), High Definition Television (HDTV), and digital phone. The company experienced subscriber growth across all its operations. Basic cable net subscriber additions during the reported quarter were 9,622 to 2,283,526, Digital customers increased 110,810 to 1,187,183, and Internet and Digital Phone lines climbed by 24,625 to 1,650,959 and 54,633 to 774,009, respectively. DTH subscribers rose 1,580 to 898,213. In order to satisfy the growing consumer demand for more speed and higher performance, Shaw in the previous quarter increased its Internet offerings by more than 50% and launched High-Speed Nitro, a new 100 Mbps service. Internet penetration of basic subscribers is now 72.3% compared to 69.4% at August 31, 2008.

Shaw's 3Q09 EPS from continuing operations increased 11.1% year over year to C$0.30, whereas on a net basis, including non-operating items, EPS increased 3.3% to C$0.31. Consolidated service revenue increased 8.7% year over year to C$861.4 million for 3Q09, owing to customer growth across its Cable and Satellite segments and rate increases. The Cable Division's revenue for the reported quarter grew 10.2% to C$669.6 million, whereas Satellite Division's revenue increased 4.1% to C$191.8 million.

EBITDA for the reported quarter grew 11% to C$395.3 million, driven by an increase in revenue, whereas EBITDA margin expanded 90 basis points to 45.9% in 3Q09 from 45.0% in 3Q08. The company's free cash flow has nearly doubled, increasing 90% to C$154.3 million on account of increased EBITDA and lower capital expenditure.

Shaw's management has reiterated its guidance for fiscal year 2009 with EBITDA growth of 10% in Cable division, and modest growth in Satellite division. The company still targets a free cash flow generation of at least C$500 million for fiscal year 2009.

Despite a strong track record of earnings and a healthy outlook, we maintain a Hold rating on the stock. We believe that with the completion of the spectrum auction for advanced wireless services on July 21, 2008, the new entrants may substantially increase Shaw's competition and reduce its market share.

Key Points:

• Despite the resignation of Jerry Yang, forecasts are trending downward for Yahoo
• Other Internet companies are doing well, however, such as Sohu.com and United Online

Without Merger, Few Positive Catalysts For Yahoo Over The Short-Term

Yesterday, Yahoo (YHOO) announced the resignation of Jerry Yang from the CEO post. The announcement was met with cheer as shares rose by nearly a buck to $11.55.

Playing a role in the upward move were speculators hoping for renewed merger talks with Microsoft (MSFT). The problem is that there is no guarantee that a merger will occur.

Without a merger, there are few catalysts for the stock. Naming a well-respected outsider as a CEO might help, but the company is struggling with both tough competition and a weak economy. During the past 30 days, 17 brokerage analysts have lowered their 2009 profit projections.

There Are Attractive Internet Stocks

Despite the problems with Yahoo, Internet Services is among the top 50 industry groups. This group contains 1 Zacks #1 Rank ("strong buy") stock, United Online (UNTD), and 7 Zacks #2 Rank ("buy") stocks, including Sohu.com (SOHU).

Overall, stocks within the better-ranked groups tend to outperform the markets. And while investors might be inclined to look at the top 10 or 20 groups, stocks within the top 80 groups can be viable investment candidates.

Games Score High For Sohu.com

Sohu.com operates a leading web portal in China, while also providing various other Internet and wireless services, such as online gaming.

SOHU's third-quarter earnings of $1.02 per share were 11 cents above expectations. (The company has now topped expectations for 6 consecutive quarters.) Revenues more than doubled to $120.7 million, thanks to an 18% rise in advertising revenues (the Olympics helped) and a 330% increase in gaming revenues.

The company projected fourth-quarter profits to total $1.20 per share, which was 10 cents above the then consensus earnings estimate. Analysts have not only raised their forecasts for the current quarter, but also upped their predictions for 2009 earnings. The consensus estimate now calls for profits to total $4.75 next year, a 12-cent increase over the average forecast of a month ago.

United Online Blossoms

United Online may be best known in the U.S. for its social networking web site Classmates.com and low cost ISP NetZero. Thanks to last August's acquisition of FTD Group, Inc., the company also operates the largest network of florists.

UNTD matched third-quarter expectations with profits of 22 cents per share. Revenues rose 33% to $169.2 million, thanks to the inclusion of FTD. Classmates generated growth of 18%, though the company's communication segment struggled.

Following the earnings report, the 2 covering brokerage analysts raised their 2008 and 2009 profit forecasts. The 2008 consensus earnings estimate of $1.02 per share is 14 cents higher than the average forecast of a month ago. The 2009 consensus earnings estimate of $1.26 per share is 42 cents above the average forecast of a month ago.

Short-Term Outlook Changes for Baidu.com.

The third-quarter numbers from Chinese language search engine Baidu.com (BIDU) also looked good. The company earned $1.46 per share, 22 cents better than analysts had forecast. Revenues rose 85% to $135.4 million. More advertisers signed with the company and revenues per customer rose. Again, the Olympics helped.

The majority of the covering brokerage analysts raised their 2008 and 2009 projections in response.

Given this backdrop, BIDU would seem to be another Internet-related candidate. However, a press release from the company removed some of the luster from the stock, at least over the short-term.

Following a news report, Baidu.com admitted to accepting paid listings for certain popular medical terms from medical companies that did not hold the proper licenses. BIDU has removed the paid listings in question until the advertisers can show proof of the proper licenses.

Baidu estimates that the customers in question accounted for 10% to 15% of total revenues. It is unclear how much of the revenues will be recovered in the future, though 1 analyst has already reversed course and cut his profit forecasts for the remainder of 2008 and all of 2009. It is possible that more analysts will cut their forecasts going forward.

Related

There are various ETFs that have exposure to Internet companies, but many also include network equipment companies. Possibly the "purest" ETF is the Internet HOLDRS (HHH). This fund's largest holdings include portals, ecommerce and online brokerage firms.

There are no specific funds that target generic drug makers.

Zacks Premium and Zacks Elite subscribers can view the Zacks Industry Rank List at http://www.zacks.com/zrank/zrank_inds.php. This interactive list allows you to see all of the companies, and their Zacks Rank, within more than 200 industries. Shown below is the Zacks Sector Rank List, which shows the trend in estimate revisions on a broader scale.

Sector Rank as of Nov 19
Sector	This Week's Zacks Rank	Last Week's Zacks Rank	FY08 Revisions Ratio	FY08 Estimates Revised Up	FY08 Estimates Revised Down	FY09 Revisions Ratio
Medical	2.57	2.56	1.02	945	929	0.69
Computer and Technology	2.91	2.90	0.43	820	1922	0.20
Aerospace	2.98	2.83	1.20	101	84	0.35
Transportation	2.98	2.99	1.24	282	227	0.46
Consumer Discretionary	2.98	3.01	0.46	246	532	0.20
Business Services	3.00	3.01	0.31	92	297	0.13
Utilities	3.01	2.98	0.40	136	336	0.19
Consumer Staples	3.10	3.04	0.36	144	405	0.19
Retail-Wholesale	3.18	3.11	0.25	218	861	0.16
Finance	3.19	3.19	0.32	656	2033	0.12
Construction	3.21	3.24	0.27	62	226	0.08
Industrial Products	3.22	3.19	0.36	155	429	0.07
Oils-Energy	3.24	3.26	0.42	409	975	0.21
Basic Materials	3.30	3.33	0.26	123	472	0.09
Conglomerates	3.41	3.37	0.18	13	74	0.04
Auto-Tires-Trucks	3.49	3.62	0.07	12	175	0.07

Charles Rotblut, CFA, is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

"HHH2" Free Stock Analysis: Buy? Sell? Hold?
"MSFT" Free Stock Analysis: Buy? Sell? Hold?
"BIDU" Free Stock Analysis: Buy? Sell? Hold?
"NZRO" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

“There has been a lot of talk recently about Embarq wanting to be acquired,” Kagan told MarketWatch.com. “However, the financial crisis that is on the front page every day made finding a partner difficult. That may have lowered the price Embarq hoped to get. CenturyTel saw an opportunity and jumped in to acquire Embarq. Timing was on CenturyTel’s side in this deal.”

The all-stock deal – announced yesterday (Monday) – calls…

In addition, the company has shifted to indirect selling (focus on phone companies) from sales and marketing addressing consumers directly. Although these changes incorporate additional business risks and will result in net earnings losses, they are expected to provide top-line sales momentum over the next two years.

We believe the challenging transition to a new business model (which is more dependent on wireless services and sales through local phone companies) and exposure to competitive offerings in the market will continue to limit stock appreciation. However, we maintain our Hold recommendation as we see limited downside potential with $46.8 million of net cash and indications of product acceptance at tier-2 carriers.

On the basis of price to sales (P/S), Callwave is trading at 2.2x sales primarily due to lower estimated revenues for 2008. We believe the stock will trade at such metrics given the changing business fundamentals and the challenging competitive environment. To Callwave's advantage, the company has significant cash on its balance and, therefore, we set a target price of $2.30 near its cash position and based on limited growth over 2008.

Anindya Barman contributed to the report.

Read the full analyst report on CALL

The company reported stronger than expected results in the recent quarter which were highlighted by improvement in profitability driven by robust subscriber growth. NIHD announced intentions of higher capital spending in 2008 to expand the geographic coverage of its iDEN network. Overall demand for wireless services in Latin America remains strong and key growth markets, including Brazil and Mexico, offer financial growth opportunities.

However, the company remains challenged with higher than expected churn levels as well as growing competition in its regional markets. Ongoing consolidation activities and aggressive deployments of next generation wireless services by competitors may foster higher customer churn moving forward. We take a conservative approach to valuation, maintaining our Hold recommendation until we are convinced with the sustainability of NIHDÂ’s earnings and overall financial momentum.

NIHD is trading at 18.2x our estimate for 2008 earnings, which represents a premium to the forward P/E ratio for the peer group (consisting of other pure-play wireless operators in the Americas region) averages. On the basis of enterprise value (EV) to EBITDA (a common valuation metric for wireless carriers), the stock is trading at 8.6x estimated EBITDA for 2008, at a premium to the peer group average. We set a valuation target of $57.50 based on 20x 2008 earnings projection.

Anindya Barman contributed to the report.

Read the full analyst report on NIHD