Carphone Warehouse Update Defies Mkt Concerns
Wednesday January 22, 6:45 am ET
By Elena Berton, Of DOW JONES NEWSWIRES
biz.yahoo.com
LONDON (Dow Jones)--Carphone Warehouse Group PLC Wednesday pleased investors by posting strong third quarter sales figures and erased fears of an impending profit warning by saying full-year results will meet expectations.
Shares in Europe's largest mobile phone retailer reversed recent falls as the company said that in the 13 weeks to Dec. 28 comparable revenues rose 9.1%, while gross profit was up 6.9%.
In the key Christmas period over the four weeks ended Dec. 28, comparable revenues rose 14% and gross profit rose 7.8%, with connections up 11.1%. Connections in the three weeks to Jan. 18 rose 21.8%.
"Given the share price fall in the last few days, the market had been expecting a profit warning today. The fact that Carphone Warehouse came up with decent numbers should go quite well," said Numis Securities analyst Iain McDonald, who has a buy recommendation.
Shares in Carphone Warehouse reversed the trend of the last two days, and at 1120 GMT the stock was up 2.25 pence, or 3.6%, at 65 pence.
Jittery investors had sent shares down Monday and Tuesday fearing negative news after retailer Dixons Group PLC's downbeat comments on its mobile phone margins and weakness in Finnish mobile manufacturing giant Nokia Corp..
"Carphone will almost certainly have taken market share in the important U.K. market, supporting the view that it has the premier model in this space," said Nathan Cockrell, an analyst at Credit Suisse First Boston.
Chief Executive Officer Charles Dunstone, who owns nearly 40% of the company, told Dow Jones Newswires that multimedia messaging, or MMS, handset sales were at the upper end of expectations and sales of Vodafone Group PLC's live! service were particularly strong.
"MMS was a strong part of our sales. All available handsets sold well," he said, but declined to provide detailed figures.
He added that growth in MMS sales in the first three weeks in January continued at the same level as Christmas.
Dunstone was also upbeat about the U.K. residential fixed-line telecom service the company is launching in February, which he expects to secure between 200,000 and 250,000 connections in the first year.
"We are looking at a 10%-20% penetration of our mobile phones customers," he said.
The company is using the infrastructure of Opal Telecom, the fixed-line provider it bought in November for GBP65 million, to launch the service in competition with BT Group PLC .
Carphone Warehouse runs more than 1,100 stores in Europe, selling mobile phones and services from major manufacturers and service providers.
Company web site: carphonewarehouse.com
-By Elena Berton, Dow Jones Newswires, 44-207-842-9267; elena.berton@dowjones.com |
