(NTT) Nippon Telegraph & Telephone Corporation Outperforms Expectations

February 8th, 2010

Nippon Telegraph & Telephone Corp. (NTT) declared better-than-expected fiscal third quarter 2010 financial results. On a GAAP basis, net income in the third quarter of fiscal 2010 was approximately $1,523 million or $1.15 per share, compared to net income of approximately $1,473 million or $1.10 per share in the prior-year quarter.

The third quarter EPS of $1.15 far exceeded the Zacks Consensus Estimate of 46 cents per share. This was primarily due to a significant decline in operating expenses.

Quarterly total revenue of $28,140 million was an increase of 2.4% year-over-year. This was also better than the Zacks Consensus Estimate of $27,714 million. The improvement in revenue was mainly due to higher IP/Packet Communication services, together with the favorable movement of foreign exchange rate.

Operating income in the third quarter was approximately $3,354.7 million, compared to around $2,881 million in the prior-year quarter. Quarterly operating margin was 11.9% compared to 10.5% in the year-ago quarter. This was mainly due to massive reduction in cost of equipment sold and depreciation & amortization charges.

Nippon generated approximately $4559.2 million cash from operations during the reported quarter, compared to approximately $4,663.5 million in the prior-year quarter. Quarterly free cash flow (cash flow from operation less capital expenditure) was around $1,639 million, compared to around $1,031.8 million in the year-ago quarter.

At the end of the third quarter 2010, Nippon had approximately $11,710 million of cash & marketable securities on its balance sheet compared to around $15,777.9 million at the end of the prior-year quarter. Total debt was $50,430.4 million at the end of the same quarter compared to $47,737.8 million at the end of the year-ago quarter.

Zacks Investment Research

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Read more on Nippon Telegraph and Telephone at Wikinvest


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