reports
- Allan C. Nichols
SoftBank’s Fiscal 2018 Result Below Expectations; FVE Decreased to J...
Softbank’s underlying fiscal 2017 (quarter ending March 2018) result was below expectations with the domestic telecom business reporting a slight increase in revenue but an operating profit decline of 5.1%, dampening underlying group operating profit which declined 2.5% year over year (ex-SoftBank Vision Fund). The reductions in the operating profit from ARM and the domestic telecom business were the main drivers of the consolidated operating profit decline and Rakuten’s potential entry into...
- Allan C. Nichols
Deutsche Telekom Reported Good 1Q Results Excluding Foreign Exchange; ...
Deutsche Telekom reported good first-quarter results when adjusted for currency movements. The firm reported revenue down 3.9% year over year, though most of this was due to the euro strengthening versus the U.S. dollar. On an organic basis, the firm’s revenue grew 3.1% versus our full-year projection of 2.3%. We expect to maintain our EUR 17 per local share fair value estimate and no-moat rating and believe the shares are undervalued. The firm’s main driver continues to be T-Mobile US, whic...
- Allan C. Nichols
SoftBank to Benefit from Sprint T-Mobile Merger if it Goes Ahead; FVE ...
We lift our SoftBank fair value estimate to JPY 12,300 per share from JPY 11,900 per share, on the back of the announced merger agreement between Sprint and T Mobile. In assessing the Sprint-T-Mobile merger we apply a 50% chance that the merger will attain regulatory approval and we factor in around 50% of the mooted USD 43 billion of synergy benefits to the combined T-Mobile group. Our experience has been that not all those savings will be kept by the combined company. We expect some of the sav...
- Allan C. Nichols
Sprint and T-Mobile US Attempt to Merge Again, but Regulatory Approval...
Sprint and T-Mobile US announced on April 29 that they have agreed to merge. T-Mobile will pay 0.10256 share of its stock for each Sprint share, which values Sprint at a stock price of about $6.62 (based on the April 27 closing price for T-Mobile), a market capitalization of $26 billion, and an enterprise value of $59 billion. The combined company, which will retain T-Mobile's brand and chairman, CEO, and COO, will have an enterprise value of $146 billion. Deutsche Telekom will control 42% of th...
- Allan C. Nichols
Liberty Global Announces Sale of Austrian Operations to Deutsche Telek...
Late on Dec. 21, Liberty Global announced it agreed to sell its operations in Austria to Deutsche Telekom. We were surprised by the announcement, as Liberty Global has been a serial acquirer in Europe while disposing of operations in other parts of the world. However, the deal fits with our bigger thesis regarding the importance of convergence in Europe. This move will allow Deutsche Telekom to own fixed-line telecom, broadband, pay television, and wireless telecom networks in Austria, positioni...
- Allan C. Nichols
Deutsche Telekom and Tele2 Agree to Merge Dutch Operations; Sceptical ...
On Dec. 15, Deutsche Telekom and Tele2 announced that they had agreed to merge their Dutch operations. We think this deal makes a lot of sense, as we’ve always been sceptical of Tele2’s ability to earn a decent return on its capital in the Netherlands, due to its small size. The combined firm would have enlarged scale that should help it compete more effectively against KPN and Vodafone Ziggo. Tele2 entered the Dutch market due to government incentives, including selling spectrum at a lower ...
- Allan C. Nichols
Deutsche Telekom Reported Mixed 3Q Results With Light Revenue, but Bet...
Deutsche Telekom reported mixed third-quarter results with light revenue due to adverse currency movements, but better EBITDA margins. The firm reported revenue growth of 0.8% versus our full-year projection of 3.2%. However, on a constant currency basis, Deutsche Telekom’s revenue growth was in line at 3.3%. That said, with the year coming to a close and the euro up significantly against the U.S. dollar we have reduced our T-Mobile U.S. revenue in euro terms for 2017, which pulls our down our...
- Allan C. Nichols
U.S. operations continue to drive Deutsche Telekom's results.
Deutsche Telekom reported solid second-quarter results, but we are maintaining our fair value estimate and no-moat rating. We believe the shares are slightly undervalued. The firm reported revenue growth of 6% year over year versus our full-year projection of 3.2%. The main growth region continues to be the U.S. where revenue increased 9.7% as it added another 1.3 million customers in the quarter, making 17 quarters in a row of adding over 1 million subscribers. However, this time revenue growth...
- Allan C. Nichols
Deutsche Telekom Sees Improved Revenue Growth in Europe Supplementing ...
Deutsche Telekom reported solid second-quarter results, but we are maintaining our fair value estimate and no-moat rating. We believe the shares are slightly undervalued. The firm reported revenue growth of 6% year over year versus our full-year projection of 3.2%. The main growth region continues to be the U.S. where revenue increased 9.7% as it added another 1.3 million customers in the quarter, making 17 quarters in a row of adding over 1 million subscribers. However, this time revenue growth...
- Allan C. Nichols
U.S. operations continue to drive Deutsche Telekom's results.
Deutsche Telekom reported solid first-quarter results that were a bit ahead of our expectations. We don’t expect to make any significant changes to our fair value estimate for its local shares, but will likely increase our fair value estimate for the ADR due to the recent rebound in the euro versus the dollar. We believe the shares are fairly valued, and our no-moat rating is intact. The firm reported revenue growth of 5.8% versus our full-year projection of 3.2%. However, we expect comparison...
- Allan C. Nichols
Deutsche Telekom Reported Solid 1Q Results; Shares Fairly Valued
Deutsche Telekom reported solid first-quarter results that were a bit ahead of our expectations. We don’t expect to make any significant changes to our fair value estimate for its local shares, but will likely increase our fair value estimate for the ADR due to the recent rebound in the euro versus the dollar. We believe the shares are fairly valued, and our no-moat rating is intact. The firm reported revenue growth of 5.8% versus our full-year projection of 3.2%. However, we expect comparison...
- Allan C. Nichols
U.S. operations continue to drive Deutsche Telekom's results.
Deutsche Telekom reported mixed 2016 results with better revenue but weaker margins. We expect these two issues will basically offset each other and don't anticipate any significant changes to our fair value estimate. Our no-moat rating is unchanged, and we believe the shares are fairly valued. The firm reported revenue growth of 5.6% year over year, versus our projection of 4.4%. Once again, the higher growth is being driven by T-Mobile US, where revenue jumped 25.6% in the fourth quarter thank...
- Allan C. Nichols
U.S. operations continue to drive Deutsche Telekom's results.
Deutsche Telekom reported mixed 2016 results with better revenue but weaker margins. We expect these two issues will basically offset each other and don't anticipate any significant changes to our fair value estimate. Our no-moat rating is unchanged, and we believe the shares are fairly valued. The firm reported revenue growth of 5.6% year over year, versus our projection of 4.4%. Once again, the higher growth is being driven by T-Mobile US, where revenue jumped 25.6% in the fourth quarter thank...
- Allan C. Nichols
Deutsche Telekom Reported Mixed 2016 Results With Better Revenue, but ...
Deutsche Telekom reported mixed 2016 results with better revenue but weaker margins. We expect these two issues will basically offset each other and don't anticipate any significant changes to our fair value estimate. Our no-moat rating is unchanged, and we believe the shares are fairly valued. The firm reported revenue growth of 5.6% year over year, versus our projection of 4.4%. Once again, the higher growth is being driven by T-Mobile US, where revenue jumped 25.6% in the fourth quarter thank...
- Allan C. Nichols
Deutsche Telekom Agrees to Sell Its Strato Business for EUR 600 Millio...
Deutsche Telekom announced on Dec. 15 that it had agreed to sell its Strato AG business to United Internet for about EUR 600 million ($630 million). DT is reviewing its businesses and looking at options to best benefit the firm through mergers, acquisitions, or divestitures. Hosting services such as Strato that are owned by incumbent telecom operators have not performed as well as independent ones, as some companies don't want to be tied to a particular carrier. We believe this is a good decisio...
- Allan C. Nichols
Deutsche Telekom's U.S. operations continue to drive the firm's result...
Deutsche Telekom reported solid third-quarter results with particular strength in the U.S. We recently increased our fair value estimate for T-Mobile U.S. to $45 per share from $40 following the third-quarter results. After incorporating the higher estimates for the U.S. unit into our model, we expect to increase our fair value estimate for the parent company by about EUR 1 per local share and $0.50 per ADR. Our no-moat rating remains unchanged. The firm's revenue grew 5.9% year over year driven...
- Allan C. Nichols
Vodafone Agrees to Sell Fixed-Line Assets in the Netherlands to Deutsc...
Vodafone has announced that it has agreed to sell its fixed-line telephone business in the Netherlands to Deutsche Telekom. While the business is small, with only 150,000 customers, selling it is part of the remedies that Vodafone offered regulators in order to receive approval for the creation of its proposed joint venture with Liberty Global in the Netherlands. Thus, we believe this increases the odds of regulatory approval. However, it also strengthens Deutsche Telekom's positioning in the co...
- Allan C. Nichols
Deutsche Telekom's U.S. operations continue to drive the firm's result...
Deutsche Telekom reported second-quarter results that were broadly in line with our expectations, and we are maintaining our fair value estimate and no-moat rating. For the quarter, the firm reported revenue growth of 2.2%, but 3.4% for the first half, versus our full-year projection of 2.7%. Revenue growth continues to be driven by its U.S. operations, which saw a 10.1% year-over-year revenue increase as the firm added another 1.9 million wireless customers in the region during the quarter, t...
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