NII Holdings Posts Q1 Loss as Expected - Analyst Blog

Latin American wireless operator, NII Holdings Inc. NIHD reported dismal first-quarter 2014 financial results, with the bottom line meeting the Zacks Consensus Estimate but the top line falling short of the same.

NII Holdings lost around 52,000 subscribers in the reported quarter. Moreover, higher churn rate, weaker exchange rate and lower ARPU had considerable impact on the company's top and bottom line. Currently, NII Holdings has a Zacks Rank #4 (Sell).

Net loss from continuing operations was $376.1 million or $2.19 per share compared with a loss of $207.5 million or $1.21 per share per in the prior-year quarter. However, adjusted loss per share of $2.14 was in line with the Zacks Consensus Estimate. Quarterly total revenue came in at $970.2 million, down 37.2% year over year and also below the Zacks Consensus Estimate of $1,008 million.

Operating expenses fell 16.6% year over year to $1,209.3 million in the quarter. Operating loss was $239.1 million against $79.5 million in the year-ago quarter.

Quarterly consolidated Operating loss before Depreciation and Amortization stood at $81.4 million against $103.3 million in the previous-year quarter. At the end of the first quarter, NII Holdings consumed $485.6 million cash from operations as against $142.6 million in the prior-year quarter.

At the end of the quarter under review, NII Holdings had $1,605.2 million in cash, cash equivalents and marketable securities compared with $2,319.6 million at the end of fiscal 2013. Total debt stood at $5,749.3 million versus $5,696.6 million at the end of fiscal 2013. The debt-to-capitalization ratio was 1.0 against 0.94 at the end of fiscal 2013.

Operating Metrics

At the end of the first quarter of 2014, the total digital subscriber base of NII Holdings fell 4% year over year to 9437,300. The company lost 52,000 new subscribers against a gain of 111,800 subscribers in the prior-year quarter. Customer churn in the reported quarter was 3.42% against 2.42% in the prior-year quarter.

Quarterly subscriber revenue ARPU was $29 compared with $39 in the year-ago quarter. Quarterly service and other revenue ARPU stood at $32 versus $44 in the year-ago quarter. Quarterly costs per subscriber added were $290 compared with $277 in the year-ago quarter.

Our Take

Other stocks worth considering in this sector include BlackBerry Limited BBRY, KT Corp. KT and America Movil S.A.B. de C.V. AMX. BlackBerry and KT Corp. carry a Zacks Rank #2 (Buy) while America Movil has a Zacks Rank #3 (Hold)