Science & Technology
Science and Technology
Science and Technology
Tue, December 7, 2010
Mon, December 6, 2010 Sprint Nextel, Clearwire, AT&T, Verizon Communications and Johnson & Johnson
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Sprint Nextel (NYSE: [ S ]), Clearwire Corp. (Nasdaq: [ CLWR ]), AT&TInc. (NYSE: [ T ]), VerizonCommunications Inc. (NYSE: [ VZ ]) and Johnson & Johnson (NYSE: [ JNJ ]) .
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Here are highlights from Thursdaya™s Analyst Blog:
Sprint Risks Seem Over
The latest wireless industry rumors about Sprint Nextela™s (NYSE: [ S ]) imminent danger, with Clearwire Corp. (Nasdaq: [ CLWR ]) running a risk of defaulting its loan agreements, seems to be over as Clearwire plans to offer $175 million in short-term notes due in 2015 and another $1 billion in debt due in 2017 and 2040.
Sprint Nextel shares rose the highest for the first time since July when Clearwire announced its plans to raise about $1.2 billion in new debt to finance further expansion of Sprinta™s wireless broadband network. Sprint Nextel owns a hefty 54% stake in Clearwire and offers speedy data services to customers via 4G WiMax (a wireless broadband technology) network in collaboration with the latter.
A month ago, Clearwire raised its doubts on its ability to accumulate funds or operate as a agoing concerna due to nagging losses, raising concerns about Sprinta™s financial position. After years of struggle, Sprint has narrowed its subscriber losses by using the Clearwire network. The 4G WiMax deployment offers a major prospect in the wireless market that might boost Sprinta™s revenues.
During the third quarter, Sprint gained approximately 644,000 subscribers, representing 364,000 retail subscribers and 280,000 wholesale and affiliate subscribers in total. This was reportedly the best wireless subscriber growth since 2006. Sprinta™s adjusted net loss per share of 18 cents surpassed the Zacks Consensus Estimate by 10 cents. Revenue increased for the first time in three years and was also above the Zacks Consensus Estimate.
Currently, Sprint extends its 4G network in 68 U.S. markets via the Clearwire network. This reach keeps the company well ahead of its rivals AT&TInc. (NYSE: [ T ]) and VerizonCommunications Inc. (NYSE: [ VZ ]). AT&T plans to roll out its 4G services in 2011, and Verizon now has initiated the launch of its 4G services, which are expected to be available in 38 markets.
Although Sprinta™s 4G deployment is dependent on Clearwire, we believe the former is well positioned to leverage the growing wireless market in the U.S. with its rich portfolio of popular smartphone offerings and more advanced devices in the pipeline. Consequently, we are currently reiterating our long-term Neutral rating on Sprint supported by its Zacks #3 (Hold) Rank.
J&J Product Recalls Continue
Product recalls at Johnson & Johnson (NYSE: [ JNJ ]) continue with Johnson & Johnson-Merck Consumer Pharmaceuticals, Co. recently recalling twelve Mylanta liquid products and one AlternaGel liquid product from the US and Puerto Rico. The latest product recall was announced just a few days after the previous recall which was related to Tylenol cold multi-symptom liquid products.
Prior to the Tylenol recall, Johnson & Johnson had recalled all lots of childrena™s Benadryl Allergy Fastmelt tablets (cherry and grape flavors) distributed in the US, Belize, Barbados, Canada, Puerto Rico, St. Martin and St. Thomas. The company also recalled all lots of junior strength Motrin caplets, 24 count, from the US market.
Moreover, the company recalled one product lot of Rolaids extra strength softchews (cherry flavor) from the US market. While the Rolaids product recall was due to complaints regarding an uncharacteristic consistency or texture, the company said that the other two product recalls were not quality-related.
Regarding the latest product recalls, Johnson & Johnson said that the recalls were at the wholesale and retail levels and were due to labeling issues.
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