Vimpel-Com's Earnings Rise 30%, Miss Estimates Due to Tax Charge

Russian wireless firm Vimpel-Communications this morning reported fourth-quarter earnings slightly below market expectations, the result of a large charge related to a tax dispute. Shares are currently higher by $0.50, or 0.53%, to $95.20 in late morning trading of ADRs in New York. Despite net income falling $70 million on a quarter over quarter basis to $198 million, or $3.89 a share, income would have eclipsed Reuters analyst expectations of $238 million if not for a $42.5 million tax dispute charge. On a year over year basis, net income gained 30%, to EPS of $3.89, compared with $2.97 a year earlier. Net operating revenue rose 59% to $1.45 billion. The company said it expects to continue its strong subscriber growth outside of Russia. Vitaly Kupeev, telecom analyst at Alfa-Bank pointed out that "overall this is a good set of results, and there is no reason for concern."

Sources: Press Release, Reuters, MarketWatch
Commentary: How To Invest In WiMAX • MTS vs. Vimpelcom: Russian Cellular Market Leaders' 3Q Results • World's Biggest Emerging Market: Russia
Stocks/ETFs to watch: Vimpel-Communications (VIP). Competitors: Rostelekom OAO (ROS), Golden Telecom (GLDN), Mobile TeleSystems (MBT). ETFs: Wireless HOLDRS (WMH)

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