Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
Dialing for Dollars in Argentina

Dialing for Dollars in Argentina

Ratings: (0)|Views: 144|Likes:
Published by sommer_ronald5741
Telecom Argentina S.S. (TEO) focuses its efforts in offering a full range of integrated fixed and wireless services. The company’s mobile strategy is oriented towards improving the mix of postpaid users by promoting 3G services, better customer service and high-end handsets. Mobile data services have room for growth despite VAS accounting for 38% of service revenue, as most revenue from VAS relates to text messaging. The strategy on fixed business continues to center on bundle offerings that include voice and broadband services.
Telecom Argentina S.S. (TEO) focuses its efforts in offering a full range of integrated fixed and wireless services. The company’s mobile strategy is oriented towards improving the mix of postpaid users by promoting 3G services, better customer service and high-end handsets. Mobile data services have room for growth despite VAS accounting for 38% of service revenue, as most revenue from VAS relates to text messaging. The strategy on fixed business continues to center on bundle offerings that include voice and broadband services.

More info:

Categories:Business/Law, Finance
Published by: sommer_ronald5741 on Oct 31, 2010
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOCX, PDF, TXT or read online from Scribd
See more
See less

06/30/2011

pdf

text

original

 
This post was published to Measured Approach at 1:58:32 PM 10/31/2010
Dialing for Dollars in Argentina
Telecom Argentina S.S. (TEO) focuses its efforts in offering a full range of integrated fixed and wirelessservices. The companys mobile strategy is oriented towards improving the mix of postpaid users bypromoting 3G services, better customer service and high-end handsets. Mobile data services have roomfor growth despite VAS accounting for 38% of service revenue, as most revenue from VAS relates to textmessaging. The strategy on fixed business continues to center on bundle offerings that include voice andbroadband services.TEO has strong operating performance driven by mobile services, solid market positions, diversifiedportfolio of services with multiple platforms and a strong financial profile. There are certain risks ininvesting in Argentina. Among the risks are political instability, an unfavorable regulatory environmentand currency risk, among others.In a recent development, Telecom Italia (TI) is to take control of TEO. Under the plan, TI will have acontrolling stake in Sofora, a holding company that in turn has a controlling stake in Telecom Argentina.The companys favorable prospects are borne out by the financial statements. The statements showconsistent growth built on a stable and strong balance sheet.Sales for 2Q10 came in at $877.6 million or 18.6% more than the $740.2 million reported in 2Q09. Salesfor the TTM totaled $3,337.7 million as compared to $2,862.4 in the year-ago period and $3,094.0million for FY09. The average growth rate for sales over the past five years is 22.2%. Six analysts makesales projections for TEO. The consensus projection for FY10 is $3,648.02 million and $3,702.55 millionfor FY11.EPS for 2Q10 was $0.58 as compared to $0.45 in the year-ago period. EPS TTM is $2.01 as compared to$1.35 for the year-ago period and $1.60 for the year ending December 2009. Analyst forecasts for FY10range from $2.26 to $2.59 with an average of $2.39. Projections for FY11 range from $2.34 to $2.73 witha consensus of $2.47. Y-O-Y, EPS grew at 48.9% and 25.6% when compared with FY11. EPS has grown atthe rate of 29% over the past five years.Free Cash Flow has been much more volatile over the years. At $1.46 TTM, it is down (25.1%) from theyear-ago period. The five year growth rate for FCF is a paltry 0.6%.A big plus for TEO is the dividend. It is currently paying a dividend of $2.15 per share, providing a yield of about 7.9%. Clearly, a dividend in excess of earnings or cash flow is unsustainable and represents a redflag.The balance sheet reflects strength. Cash and ST investments total $301.9 million whereas long termdebt is $18.7 million and other long term liabilities add another $249.3 million to the tab. Total liabilitiesare less than 5X free cash flow.The company has steadily increased its gross profit margin. The normalized margin is 43.02%. For TTM,the gross margin rose to 50.1%. This compares favorably with the industry median of 48.9%. We seeeven better improvement in operating margins. The normalized operating margin for TEO is 14.85%. Themost recent operating margin is 21.9% whereas the industry median declined to (0.8%). Net margins

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->