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Posted
Aug 11 2008, 11:50 AM
by
Kim Peterson
Rating:
The next cable monopoly? It's the Internet connection business. Cable companies are handily beating telecoms when it comes to the triple-play of Internet, phone and TV, according to Bernsterin analyst Craig Moffett. About 80% of the new broadband connections in the U.S. belong to cable. Add that to the trend of people dropping their telephone land lines, and the picture isn't pretty for telcos.
"In the harsh glare of second quarter seasonality, the telcos' wired businesses look not only like they are weakening," Moffett writes, "they look like they are positively collapsing." The landline business is down nearly 10% annually at AT&T and 12% at Verizon.
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Posted
Jul 23 2008, 09:42 AM
by
Kim Peterson
Rating:
People are ditching landlines faster than expected, analysts tell the New York Times. But AT&T gets about a third of its revenue from the landline business. Uh oh. It's a problem that all the big telcos face right now, as people get so reliant on cell phones they find no need for a traditional landline phone. That leaves investors feeling "slightly queasy" about the telecom sector these days, according to a Sanford Bernstein analyst. In its earnings report today, AT&T said its landline count dropped 2.6% in the last three months to 58.9 million -- a surprisingly fast decline. So why are AT&T shares up 5% to $33.45 today? Mainly because people are happy the company didn't do worse.
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Posted
Jun 30 2008, 04:50 AM
by
Douglas McIntyre
Rating:
Investors chase high dividend stocks with stable earnings when they are concerned about where to put their money. Which dividends appear safest?
We looked for stocks with dividend yields north of 4.5% (above 10-year T-Note) as the cut-off and those who are expected to see earnings remain ample to maintain the numbers. We had to eliminate everything tied to financial stocks in this climate as many dividends there are trimmed. We also had to eliminate anything tied to high volatility and anything tied to auto's. We screened many others, but here are seven stocks with dividends that we think will either stay the same or grow in the coming year.
24/7 Wall St. created a list of defensive stocks for 2008, and this is an update:
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Posted
Jun 18 2008, 09:47 AM
by
Kim Peterson
A big setback for DISH Network has sent shares down 7% today. And while some analysts caution not to read too much into it, I say that DISH has plenty to be worried about. AT&T is forcing DISH to pay back $500 million in debt that was supposed to be due in July of 2010. DISH says it has the money to do so, and won't have to take out a loan. AT&T played down the move, telling the Wall Street Journal that the money "could be put to better use." But this is also a clear message that AT&T has no interest in acquiring DISH. AT&T shares fell less than 1% today.
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Posted
Jun 05 2008, 12:15 PM
by
Kim Peterson
Rating:
Verizon shares are up 5% today after the company said it will buy Alltel for $28 billion, which includes assuming about $22 billion in Alltel debt. Verizon will surprass AT&T to become the largest wireless carrier in the U.S. MocoNews says Alltel is an industry pioneer: with only 13 million subscribers, it tests new services quickly and acts almost like a laboratory for everyone else. Snatching up an innovative company that isn't afraid to break new ground is important as Verizon competes with an increasing number of rivals across multiple technology fronts. Verizon picks up some assets as well; Alltel serves 57 rural markets that Verizon had no presence in.
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Posted
May 21 2008, 10:33 AM
by
Kim Peterson
Rating:
Sprint Nextel has a problem keeping customers happy, according to the latest numbers from the American Customer Satisfaction Index. Sprint's numbers are so bad, in fact, that the index's founder wonders how the company can even stay afloat. "Business is unsustainable in a competitive marketplace when customer satisfaction scores are as low as Sprint Nextel's," said the founder, Claes Fornell. Sprint's satisfaction level dropped 8% from last year to 56 on the 100-point index. Verizon scored the best in the industry, at 72. Commenters on this blog regularly slam AT&T for its service, but the company's cell phone division gained 4% to score a 71. You can see the full customer satisfaction index here.
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Posted
May 01 2008, 10:53 AM
by
Kim Peterson
I love the idea of watching television shows on my cell phone. But would I pay for it? Eh. I'm not alone here -- only about 5% of consumers are willing to pay for mobile TV. Yet that isn't stopping AT&T from launching a paid service next week that broadcasts TV programs on cell phones. AT&T is shooting itself in the foot by setting the financial bar so high that few users will sign up. According to the WSJ, you have to buy one of two new phones (at $200 or $300) to get started. Then you have to pay $15 a month on top of what you already pay for voice and data plans. The traditional two-year commitment probably applies as well. Still, investors seem to be happy with the news, because AT&T shares were up 3% at last check to nearly $40.
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Posted
Apr 03 2008, 11:45 AM
by
Douglas McIntyre
Filed under: Apple, Comcast, Ford, DirecTV, Verizon, Sirius, XM Satellite Radio, AT&T, Time Warner Cable, Toyota, GM, Clear Channel, Dish Network
Rating:
When the Justice Department cleared the merger of Sirius with XM Satellite there was anticipation that once the deal got done the shares of both companies would go up. A year ago, the combination was viewed as a dream deal.
If anything, the shares have dropped. Sirius is below $3 and XM is below $13. The market began to realize that the year wasted on getting government approval was a year the companies need to stay competitive. XM has over $1 billion in debt. Refinancing it in the current market would be nearly impossible. Selling shares would lead to extremely large dilution. As we recently noted, Goldman Sachs even put Sirius on its "Conviction Sell List" with a price target of $2.25.
Growth at Sirius has slowed considerably. In the fourth quarter revenue rose only 29% to $250 million. But, for the full year, revenue was up 45%. Subscriber deactivations in the fourth quarter were almost 540,000 compared to 330,000 in the same quarter of 2006. The firm's net loss was $166 million. Long-term debt was almost $1.3 billion.
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Posted
Mar 26 2008, 12:10 PM
by
Kim Peterson
Filed under: Google, Comcast, Time Warner, Sprint, wireless, Intel, Verizon, AT&T, Kim Peterson, Clearwire, WiMax
Rating:
Lots of big numbers are being tossed around today in support of WiMax, a wireless technology that can deliver high-speed Internet access over several miles. Clearwire is a leader in developing WiMax, and has been trying to hammer out a partnership with Sprint for months. But working out a deal hasn't been easy, partly because building out WiMax is so expensive and partly because both companies have their own struggles to deal with.
Now, the two biggest U.S. cable companies are stepping in with loads of cash. According to the Wall Street Journal, Comcast and Time Warner are talking about funding a new WiMax company, one that would be run by Sprint and Clearwire. The company would operate a nationwide WiMax network. Comcast is reportedly offering $1 billion and Time Warner is adding $500 million. Bright House Networks, a small cable company, might pony up between $100 million and $200 million.
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Posted
Mar 11 2008, 01:26 PM
by
Kim Peterson
Rating:
What a horrible day for Sprint shares. The stock hit a 20-year-low today. That's right, shares dipped to $5.55, the lowest level since July 1988. The stock price rebounded and closed at $6.17, down 8% from yesterday.
I can't find much reason for the tankage today, other than an analyst note from the Stanford Group lowering 2008 estimates to 23 cents per share from 43 cents. The analyst reviewed Sprint's last 10-K and thinks that Sprint's costs are going to go up. Last week, a Goldman Sachs analyst warned investors to "stay away from the stock." Looks like people are taking his advice. There's some piling on here in the analyst crowd, and I can't say it's unwarranted. But Wall Street's wildly varying expectations suggest a general cluelessness about where Sprint is headed. Analysts on average peg Sprint's 2008 profit at 21 cents a share. But the range of predictions goes from a 20 cent per-share loss to a profit of 87 cents.
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