Brasil Telecom Participacoes S.A. (NYSE:BRP) reported solid fourth-quarter and full-year 2006 results in late January. The consensus earnings estimate for this year has risen over the past week. The company has a price-to-book ratio of only 0.96, compared to 4.2 for the market and 2.4 for the industry.
Brasil Telecom Participacoes S.A. provides fixed-line telecommunications services in Brazil. The company also provides network services, including interconnection and leasing of trunk lines; data transmission services; and wireless services using global system for mobile communications technology.
On Jan 30, BRP posted better-than-expected fourth-quarter results. Net revenues reached R$2,741 million (US$1,280 million), up from R$2,628 million in the previous quarter and R$2,592 million in the fourth quarter of 2005. Net income reached R$267.8 million (US$125 million), from R$64.0 million in the previous quarter and a loss of R$118.6 million in the same quarter of 2005.
The wireless segment reached roughly 3.38 million subscribers, equating to a subscriber base increase of 10.7% quarter-over-quarter and 52.6% year-over-year. The broadband ADSL accesses in service increased 30% year-over-year and 5.2% quarter-over-quarter, reaching 1.32 million customers.
For the entire year, BRP’s net revenues climbed 1.6% to R$10,296.7 million when compared to R$10,138.7 million last year. Net income totaled R$470.4 million, versus a loss of R$28.3 million in the previous year.
The consensus earnings estimate for this year currently resides at $3.49. This marks a 24-cent improvement when compared to estimates of two months prior. It is up five cents over the past week.
BRP is currently trading at a valuation of 12.5x current fiscal-year estimated earnings and at 10.4x next fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 15.2x current fiscal-year estimated earnings and at 14.0x next fiscal-year estimated earnings. The company has a price-to-book ratio of only 0.96, compared to 4.2 for the market and 2.4 for the industry in which BRP participates.
BRP is a Zacks #1 Rank stock.
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