Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Latin American wireless operator NII Holdings Inc. (NIHD - Analyst Report) provided a dismal outlook for fiscal 2013, slashing its revenue and OIBDA projections by a significant margin. The new guidance was on the back of delay in the launch of 3G technology, higher churn, weaker exchange rate and lower average revenue per user (ARPU).

NII Holdings expects revenue to be in the range of $5.7–$5.9 billion and adjusted OIBDA to stay in the band of $600–$650 million. Additionally, the company expects mid-single digit subscriber growth for the projected year along with $1 billion of capital expenditure.

NII Holdings plan to successfully roll out 3G network across the highly lucrative Brazilian market. However, it may not prove to be beneficial for the company as these Latin American markets are hugely dominated by America Movil S.A.B. de C.V. (AMX - Analyst Report) and Telefornica SA (TEF - Analyst Report). Moreover, America Movil started deploying 4G LTE across these regions, which may further expand churn rate for NII Holdings going forward.

Furthermore, deployment of 3G networks requires huge cash which happens to be a major drawback for NII Holdings, thereby slowing down things further.

Moreover, NII Holdings is involved in the process of phasing out Motorola Solution’s (MSI - Analyst Report) Integrated digital enhanced technology (IDEN) and consequently integrating its new Push to Talk (PTT) technology, hence driving cost and delaying the 3G launch.

To make matters worse, Standard and Poor’s (S&P) lowered NII Holdings’ corporate credit rating by one notch to B- from the previous B rating status. The company’s debt now falls six tiers below the investment grade and is the second of its kind in the last six months after its rating was lowered in August following weak second-quarter 2012 results.

Thus, it is to be seen how long NII Holdings can face such sustained headwinds without merging with any major telecom carriers.

Currently, NII Holdings carries a Zacks Rank #4 (Sell).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 35.33 +14.82%
ANI PHARMACE ANIP 24.79 +14.66%
E HOUSECHINA EJ 10.99 +9.24%
CANADIAN SOL CSIQ 26.97 +7.15%
INTERNATIONA ICAGY 33.30 +5.38%