More Telecom Earnings

October 29, 2009

I recently discussed the Wireless Revolution and reiterated why Apple (AAPL) is my favorite stock in that sector. Except for a few stocks like Palm (PALM) and Research In Motion (RIMM), I'm not a fan of many telecom stocks.

The earnings outlook continues to be challenging for this sector. Today Motorola (MOT) reported a profit of $12 million which works out to a penny a share. Excluding charges, they made two cents a share compared with the Street's consensus for…nothing. A year ago, the company earned 18 cents a share.

The good news is that Motorola forecast Q4 earnings between seven cents and nine cents a share, and the stock is up today. I currently rate the Motorola a Hold.

The business outlook for Sprint Nextel (S) is pretty bleak. The company just reported a loss of 17 cents a share which was wider than the loss of 11 cents a share from one year ago. Wall Street was expecting a loss of 15 cents a share. Sprint is the country's third-largest wireless provider, but it lost 545,000 subscribers last quarter to bring its total down to 48.3 million. The business environment is very tough for them and I rate the stock a Sell.

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