Alltel's Wireline Spinoff On-Track
Kate DuBose Tomassi, 05.05.06, 10:16 AM ET
forbes.com
"Despite posting an earnings miss for the quarter, RBC Capital Markets analyst Jonathan Atkin maintained an "outperform" rating on shares of Little Rock, Ark.-based Alltel.
Alltel (nyse: AT - news - people ) reported first-quarter 2006 earnings of 82 cents per share on revenue of $2.5 billion on Wednesday, missing the analyst's estimates of 83 cents per share on revenue of $2.6 billion.
Still, the analyst called the quarter "strong," with particular strength in wireless subscriber growth and record DSL net subscriber additions.
In a report Thursday, the analyst attributed the miss to lower-than-expected wireless equipment revenue and a timing difference in the contribution from the company's acquisition of Midwest Wireless.
Alltel's planned wireline spin-off is on track, having received approvals from the Federal Communications Commission, the Federal Trade Commission, and several states so far, according to the analyst.
He believes Alltel will get approval from the remaining states in time to complete the spin-off midyear. The new wireline company will be named Windstream Communications.
The analyst maintained a $70 price target on Alltel shares and lowered his 2006 earnings-per-share estimate to $3.36 from $3.52." |
