For Immediate Release
Chicago, IL – July 13, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Sprint Nextel (S), Ericsson AB (ERIC), Verizon (VZ), AT&T (T) and Infosys (INFY).
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Here are highlights from Friday’s Analyst Blog:
Sprint Outsourcing to Ericsson
The third largest US wireless carrier Sprint Nextel (S) is outsourcing its networks to Sweden-based Ericsson AB (ERIC) under a seven-year agreement worth $4.5 billion to $5 billion (almost equivalent to the cash available on Sprint’s balance sheet), representing one of the largest network outsourcing deals in the global telecom industry. The agreement, however, excludes the company’s high-speed wireless broadband (WiMax) network.
Ericsson, a leading manufacturer and supplier of telecommunication equipment, will manage, optimize and operate Sprint’s CDMA and iDEN technology based wireless networks as well as wireline network. On the other hand, Sprint will maintain full ownership and control of its network assets and will continue to solely make network strategy and investment decisions.
Under the agreement terms, approximately 6,000 Sprint employees will be transferred to Ericsson by the end of the third quarter of 2009 which will be followed by the shift of network operations within 1-1.5 years.
The historic outsourcing deal has come to rescue of the struggling US carrier as it remains significantly challenged by customer retention problems, further exacerbated by the recession. Sprint continues to experience lower revenues from its wireless operation due to decreasing subscriber count (especially in the postpaid segment), largely attributable to the integration problems associated with Nextel’s iDEN wireless network, which it acquired in 2005.
Over the years, Sprint has made considerable capital outlay to unify its own CDMA network with the iDEN based platform that offers instant push-to-talk mobile service. However, this phase-out has prompted many of its subscribers to switch to other carriers (over 4 million subscribers lost in 2008), primarily to larger peers such as Verizon (VZ) and AT&T (T).
Infosys Beats Estimates
Infosys (INFY) has exceeded our revenue and earnings estimates for the first quarter of 2010. Total revenues went up by 1.6% year over year in the quarter, while earnings per share increased by 1.9% year over year. Infosys continues to win transformational deals, solution-based engagements and systems integration projects.
Clients are leveraging Infosys’ industry expertise on projects directed at gaining a competitive advantage. Infosys’ consulting services is also contributing to growth. Corporations are benefiting from Infosys’ engineering services, particularly its Product Lifecycle Management (PLM) expertise. Infosys continues to strengthen its position in the banking and capital markets sector.
In the first quarter, the company launched the Finacle direct banking solution — a comprehensive solution that supports full-fledged branchless delivery of banking services through the Internet, mobile phones or land-lines. Infosys’ BPO business continues to grow, owing to its ability to provide seamless customer support and deliver consistent value.
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