(MICC) Millicom International Cellular SA Beats the Street

April 20th, 2010

Millicom International Cellular SA (MICC) has announced first quarter 2010 financial results. Quarterly total revenue of $905 million was an improvement of 16% year-over-year but down 2% sequentially. First quarter revenue of $905 million was also better than the Zacks Consensus Estimate of $891 million. This was mainly due to higher contribution from African and Latin American regions.

On a GAAP basis, net income in the quarter was $155.5 million or $1.43 per share, compared to a net income of $138.5 million or $1.28 per share in the prior-year quarter and a net income of $454.2 million or $4.18 per share in the previous quarter. However, first quarter adjusted (excluding special items) EPS was $1.40, significantly above the Zacks Consensus Estimate of $1.25. This was primarily due to impressive contribution from the high-margin value-added services products.

Quarterly gross margin was 79.1%, compared to 78.3% in the year-ago quarter. EBITDA during the first quarter was $423.8 million, compared to $351.8 million in the prior-year quarter and $430.7 million in the previous quarter. This reflects the aggressive cost cutting measures taken by management during the past one year.

Quarterly EBITDA margin was 46.8%, compared to 45.2% in the year-ago quarter and 46.6% in the previous quarter. This was well above management’s long-run target of 45%. Millicom guided EBITDA margin to remain above 45% during 2010, a respectable level for telecommunications carriers.

As of Mar 31, 2010, Millicom had approximately 35.1 million wireless subscribers, up 21% year over year. Out of this number, 1.5 million were high-speed 3G subscribers. During the reported quarter, the company added 1.2 million net new mobile customers. This reflects a massive swing in customer intake in Chad, Tanzania, and DRC.

During the first quarter, operating free cash flow was $234.3 million, compared to $105 million in the prior-year quarter. This represents 25.9% of total revenue. Total free cash flow was $200.1 million in the same quarter, compared to just $66.4 million in the year-ago quarter.

At the end of the quarter, Millicom had approximately $1,531.4 million of cash & marketable securities on its balance sheet, compared to $1511.2 million at the end of fiscal 2009. Total debt was approximately $2,355.2 million at the end of the same quarter, compared to around $2,346.9 million at the end of fiscal 2009.

Segment-wise Results

Central America generated $322 million of quarterly revenue, down 1.2% year over year. South America generated $312 million of quarterly revenue, up 17% year over year. Africa generated $217 million of quarterly revenue, up 26% year over year. Cable segment generated the rest $54 million of quarterly revenue, up 9% year over year.

Share Buyback and Dividend

On Apr 15, The Board of Directors of Millicom decided to return $800 million to its shareholders through a unique combination of special dividend and share buyback program. The company will pay a special dividend of $4.60 per share in addition to the proposed 2009 annual dividend of $1.40. The special dividend will have total worth of $500 million. The rest $300 million will be paid through share buyback program from open market purchase on NASDAQ by the end of 2010.

Zacks Investment Research

Stock Blog Hub

(MICC) Millicom International Cellular SA Beats the Street

Author

Keyword Topics

Stock Blog Hub

(MICC) Millicom International Cellular SA Beats the Street

Author

Keyword Topics

Tag Cloud

Share This Post