More on TSC's comments on cap-X spending:
thestreet.com
WRHambrecht's report on Verizon states:
Overall wireline capital spending increase.
Verizon noted plans to spend $12.5-$12.7 billion on its wireline network in 2001, about a 4-5% increase over the $12.1 billion invested in 2001. This is about the same rate of growth in spending witnessed in 2000 versus the $11.5 billion in combined Bell Atlantic and GTE spending in 1999.
Strong increases in spending on data/broadband networking and access.
Driven by 30% revenue growth rates, spending on broadband and data networking gear is expected to increase 20% in 2001 to $4.7 billion. The bulk of this will likely be spent on current technologies such as DSL, optical networking, Frame RelayATM switching and IP routing gear. Spending on voice is expected to be down slightly but is still a nuge number at $5.5 billion.
>>>>>>>>>>>
Based on the above, how could TheStreet.com claim VZ is raising its spending by only 2%? Considering VZ is one of the largest carriers in the US (if not the largest), I feel this is a huge error on their part.
From the WSJ:
public.wsj.com
So, rather than hand off phone and data communications bound for Europe, Asia or Latin America to other carriers as it is doing now, Verizon plans to spend about $1 billion over five years installing its own transmission equipment and buying capacity on undersea and underground cables in the hope it will be able to keep that business to itself.
Another report of interest, from FLAG [FTHL].
biz.yahoo.com
From DBAB's 2/08/01 report:
* EBITDA was positive for 2001, a year ahead of expectations.
* EPS loss was $0.20 for the quarter, which was $0.09 better than our estimated $(0.29) on lower than expected interest expense.
* We believe that these results are proof once again that the demand/pricing environment for bandwidth sales is robust, and still not following the doomsday scenario put forth by bandwidth naysayers.
* We believe FTHL is an enviable position, partially financing network completion by leveraging completed segments that generate revenue and cash flow. This is in contrast to wholesale global builds that must prove their business plans actually work AFTER completion.
*. . . We believe FTHL will have a seamless global network, operational by YE2002.
* . . . results only reflect revenue from one system, Flag Europe Asia. The synergistic effect of a full global network has yet to be felt.
* We believe the company's divisional results continue to reflect industry strength. Capacity sales adjusted revenue grew at over 490% sequentially. Cash EBITDA margin expanded over 21.4% sequentially. This indicates to us that capacity sales remain strong and while there may be price declines, costs are falling more rapidly.
* FP-1 cost lowered to 1.9Bn From $2.1Bn: Because of certain design improvements in the planned route, FP-1 should cost about $200Mn lower than the original plan of the trans-Pacific system, which is now due to be RFS in 2H02. . . .
* The FLAG Europe-Asia (FEA) route continues to see strong demand in the region and will eventually be linked to the FNAL pan-Asian cable.
* We are reiterating our BUY investment rating and our 4A01 price target of $37 based on our 10-year pre-FA-1 DCF. In our opinion, FTHL continues to provide investors the confidence of solid financials and execution in volatile markets. The stock remains extremely cheap given the company's newly issued guidance. FTHL is trading at a 60% discount to the Multimedia Network Operators (MNO) on a Revenue multiple basis, and a growth adjusted multiple basis. Even on a Net PP&E multiple basis, FTHL is trading below 1.0x. We contend the discounted valuation of FTHL is simply the best opportunity in the sector today.
* We urge investors to take advantage of the current price now as we believe there will be upside catalysts forthcoming, such as network announcements. |
