I would have liked to have seen those bars on estimates raised along with the stock price, but I guess that'll have to do for now.
I wonder if this has been figured into the mix? GI not mentioned, but I'm sure is part of this group:
Telephone Suppliers See Bounty in Brazil After Telebras Sale
Sao Paulo, July 31 (Bloomberg) -- Telephone-equipment makers such as Ericsson AB, Nokia Oyj, and Lucent Technologies Inc. are likely to be among the first to benefit from Brazil's $19 billion sale this week of its telephone network.
While telephone companies such as Spain's Telefonica SA paid two-thirds more than the government's asking price, they'll have to spend another $52 billion in the next seven years to build and expand phone networks.
That means big business for the world's telephone-equipment suppliers.
''This market is going to explode,'' said Verner Dittmar, general director of telecommunications at Siemens AG's Brazil unit.
Siemens, which Dittmar said is the third-largest telecom equipment provider in Brazil after Japan's NEC Corp. and Sweden's Ericsson, has seen its shares rise over 6 percent since the Telebras sale Wednesday.
Yesterday, the day after the Telebras auction, Lucent rose 6 1/4 at 95 1/4, Nokia ADRS rose 4 3/8 to 90. Ericsson's shares are up more than 5 percent to 239 over the last three days.
Europeans
On the Brazilian stock market, Ericsson Telecomunicacoes SA, the Swedish company's local unit, was the ninth-biggest percentage gainer over the past month, gaining 27 percent, as it became clear that the long awaited Telebras sale would proceed as scheduled.
The results of the auction could be a further boon to Ericsson.
''The Europeans got a lot of (Telebras),'' said David Wheeler, an analyst with Bear Stearns & Co. in Sao Paulo. who recently raised his rating on the stock to ''attractive'' from ''neutral.'' ''Those are all big clients of Ericsson.''
Telefonica, Telecom Italia and Portugal Telecom SA were the biggest bidders in the auction.
Though increasing competition from the likes of Northern Telecom Ltd. could shrink Ericsson's market share in the area of cellular phones, the increase in investment will end up benefiting the company, he said.
Smaller companies could benefit too.
Mastec
Miami-based Mastec Inc., which makes infrastructure for telecommunications and has a joint venture with one of the Brazilian Telebras bid winners, has seen its shares soar almost 10 percent this week.
''Total telecom capex in Brazil could potentially double within a one-year time frame from $6 billion per year to $12 billion per year,'' said Morgan Stanley Dean Witter analyst Chris Gutek in a report reiterating an ''outperform'' rating on the stock. ''Mastec's joint venture is well positioned to get some of this pending flood of construction spending.''
Mastec has been best-known for its ties to its former chairman, the late Jorge Mas Canosa, who was the leading anti- Castro activist in the U.S. His son, Jorge Mas Santos, is the company's president and chief executive officer.
Mastec's Brazilian joint venture partner Inepar SA was part of the bidding group that acquired control of the huge Telebras unit spanning from the beaches of Rio de Janeiro to the rain forests of the Amazon.
Mixed Signals
The Telebras auction winners have so far given mixed signals on their intentions on who will get their equipment contracts.
Telefonica said the same day as the Telebras auction that it planned to use France's Alcatel SA, the world's No. 4 telecommunications equipment maker as its wireless equipment provider worldwide. It's unclear who Telefonica will use to upgrade conventional phone networks.
Telefonica bought parts of three wireless networks, including a piece of the biggest, in Sao Paulo.
Portugal Telecom director Luis Avelar said the company's main goal in upgrading the cellular network for Sao Paulo state, which it acquired for $3.1 billion, will be to cut down on the number of providers the state-controlled Telesp Celular SA used.
''Nec will be well placed, but I cannot tell you how we will pursue it in the future,'' he said.
Canada's Telesystem International Wireless Inc., which bought control of two cellular companies, will decide suppliers based on competitive bidding, said its spokesman Mark Boutet. In the past in Brazil, the company has used Canada's Northern Telecom, but it's used a variety of suppliers in the rest of the world.
Expectations
Manufacturers of telephones and related equipment expect sales to surge about 30 percent next year to about 13 billion reais, or almost double sales in 1997. The industry also is likely to generate about 100,000 new jobs in the next decade.
Equipment makers already are scrambling for financing and talking with the companies that bid for Telebras, said Roberto Isnar, vice president of Abinee, an association of electrical and telecommunications equipment makers.
The growth should continue to fuel an already fast-growing industry.
Over the past five years, the telecommunications industry has grown faster than Brazil's economy. Between 1991 and 1996, the industry grew an average 14 percent a year, while the economy growth averaged 2.9 percent.
With only 11 telephones for every 100 inhabitants, the nation's telephone system has always hampered companies and elevated costs. For example, companies still pay more than 1,000 reais to buy a telephone line in Sao Paulo, Brazil's industrial heartland.
11:50:52 07/31/1998
Any redistribution of Bloomberg content, including by framing or similiar means, is expressly prohibited without the prior written consent of Bloomberg L.P. Any reference to the material must be properly attributed to Bloomberg News.
The information herein was obtained from sources which Bloomberg L.P. and its suppliers believe reliable, but they do not guarantee its accuracy. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any securities or commodities.(C) Copyright 1998 Bloomberg L.P. BLOOMBERG, Bloomberg News, Bloomberg Financial Markets, Bloomberg Television, Bloomberg News Radio are trademarks, tradenames and service marks of Bloomberg L.P. |
