This article's dated yesterday, but still worth posting:
April 15, 1998 3:11 PM
CAPITAL MARKETS REPORT
Nextel Comm. Reduced Cash Flow Losses
Applauded By Analysts
NEW YORK (Dow Jones)--Analysts' positive opinions
about Nextel Communications Inc. were reinforced
Wednesday by the release of figures showing a surge in
subscribers and a narrower loss on cash for the first
quarter.
But, while the stock rallied on the news, the company's
bonds were unchanged. Fixed-income market players
said the report was already priced in to the debt.
The McLean, Va. wireless services company released
its first quarter earnings Wednesday, displaying a
decrease in its first quarter losses on EBITDA or
earnings before interest, taxes, depreciation and
amortization to $105 million from $112 million.
"The cash flow decrease was right in line with
expectations," said Greg Froehlich, telecommunications
analyst with Merrill Lynch's fixed income group.
"We expect their EBITDA to finally turn positive at the
end of the year," he added.
The company's chairman and chief executive, Dan
Akerson, attributed the improvement to subscriber
additions, which increased by 370,800 to 1.64 million in
the U.S.
"Certainly their growth in subscribers is a positive sign,"
said Doug Bontemps, telecommunications analyst with
Moody's Investor Services.
Though Nextel's bonds didn't react, its stock gained
7/16 to 32 13/16 although it fell back later in the day.
Nextel's 10.65% senior redeemable discount notes, due
2007, were unchanged at 67 1/8, according to a
high-yield trader. He said the market had already priced
in the results.
Moody's had recently upgraded these notes to B2 and
Standard & Poor's rates them at CCC+.
Moody's Bontemps noted that though no upgrade is
expected in the near-term, "it is growing very quickly
and seems to be seeing success and their bad debt is
more under control now than last year."
-Pallavi Gogoi; 201 938 2122;
Pallavi.Gogoi@cor.DowJones.com |
