We expect Latin American carrier,
NII Holdings Inc.
) to beat expectations when it reports its first-quarter 2013
results before the market opens on May 2, 2013.
Why a Likely Positive Surprise?
Our proven model shows that NIHD is likely to beat earnings
because it has the right combination of two key ingredients.
Positive Zacks ESP
: Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is +19.12%. This is a
meaningful and leading indicator of a likely positive earnings
Zacks Rank #3 (Hold)
: NIHD currently has a Zacks Rank #3. Note that the stocks with a
Zacks Rank #1 (Strong Buy), 2 (Buy) and 3 (Hold) have a
significantly higher chance of beating the earnings.
The combination of NIHD's Zacks Rank #3 (Hold) and +19.12% ESP
makes us confident of a positive earnings beat on May 2,
What is Driving the Better-Than-Expected
We expect NIHD to deliver positive results based on its
strategic decision to revamp its business model, which includes
deployment of 3G wireless networks in emerging Latin American
economies and increase in distribution of channels by expanding
its retail outlet base. The company has already started offering
3G services in Mexico and Brazil based on which we expect NIHD to
attain subscriber growth in the upcoming quarter.
Recently, NII Holdings combined with Motorola Mobility to
launch Atrix HD smartphone in Mexico, which is preloaded with
NIHD's PTT service. NIHD's Mexico customers will be able to enjoy
the PTT service with a high-end smartphone.
This will be a new source of revenue for the company. However,
we remain concerned about the stiff competition and increased
promotional expenses in the Latin American market coupled with
foreign exchange risk, which could restrain NIHD's earnings
Other Stocks to Consider
Other companies you may consider on the basis of our model,
which have the right combination of elements to post an earnings
beat this quarter are as follows:
American Tower Corporation
) currently has an Earnings ESP of +6.25% and holds a Zacks Rank
) has an Earnings ESP of +1.89% and holds a Zacks Rank #3
Dish Network Corporation
) has an Earnings ESP of +1.89% and carries a Zacks Rank #3
AMER TOWER CORP (AMT): Free Stock Analysis
DISH NETWORK CP (DISH): Free Stock Analysis
NII HLDGS-CL B (NIHD): Free Stock Analysis
TELUS CORP (TU): Free Stock Analysis Report
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