For NTT DoCoMo, It's Evolve... Or Else
Stephen Simpson, CFA
Stephen Simpson, CFA
Thu, Apr. 28, 5:50 AM
Mon, Feb. 1, 12:41 PM
- NTT DoCoMo (NYSE:DCM) is up 5.3% in U.S. trading after Friday's earnings included not only a strong beat on profits, but also plans for up to $4.1B in buybacks.
- Shares closed up 14.2% in Tokyo, its biggest jump in almost 16 years, in its first trading day since announcing the results.
- Nomura bumped its price target to ¥3,030, from ¥2,860 -- implying 20% upside from Friday's close, and another 5% upside yet from today's close -- in part due to "generous shareholder returns."
- The firm strongly reaffirmed its Buy rating and says it's their sole second pick behind NTT in investment preference. It raised its valuation multiple to 7.5 times forward EBITDA, from a previous 7.25 times.
- “The company has strong subscriber numbers, rising ARPU, an improved churn rate and reduced capex,” wrote Credit Suisse's Hitoshi Hayakawa. “We expect NTT DoCoMo shares to continue gaining for the time being.”
- Previously: DoCoMo +3.2% on strong profit beat, repurchase of up to $4.1B (Jan. 29 2016)
Fri, Jan. 29, 9:27 AM
- NTT DoCoMo (NYSE:DCM) is up 3.2% premarket in U.S. trading after posting fiscal Q3 results where it beat expectations easily, said it would beat full-year forecasts and pursued a buyback of up to $4.1B in shares.
- Net income of ¥175.3B easily beat expectations for ¥126.5B, while revenues of ¥1.17T were in line. The company had realigned its three former segments (mobile communications, smart life, other) into three slightly newer segments after the launch of its fiber broadband.
- It's going to buy back up to 220M shares (some 5.7% of non-treasury stock outstanding) this year -- up to a maximum of ¥500B.
- DoCoMo reiterated its guidance for full-year income of ¥490B and revenues of ¥4.49T.
- Press Release
Fri, Jan. 29, 6:32 AM
Wed, Jan. 13, 7:17 PM
- Nippon Telegraph & Telephone (NTT -1.3%) makes Morningstar's list of "no-moat, high-uncertainty" stocks to avoid, at least until they come way down in price.
- The company's got nice value in its stake in NTT DoCoMo (NYSE:DCM), but its fixed-line business is struggling -- which would be less of an issue if you weren't able to invest directly in DoCoMo.
- "We assign no economic moat to NTT," says Morningstar's Dan Baker. "The business has generated a return below its weighted average cost of capital for each of the past seven years, and we expect this to continue for the next five years."
- Most fixed-line business have narrow moats because cost barriers tend to make them natural monopolies, but this is "less so" for NTT, since regulators allowed competitors into its last-mile local loop net on the cheap.
- "This, along with favorable government tax and interest treatments for fiber rollouts, encouraged NTT and competitors to aggressively roll out fiber," he writes. "Japan has a high population density with significant apartment living, which makes it more economical for more than one operator to roll out fixed-line services."
- ADRs for NTT have appreciated 50% over the past year; ADRs in DoCoMo have gained 34.4% over that time span.
Oct. 30, 2015, 6:38 PM
- NTT DoCoMo (NYSE:DCM) closed up 2.8% in U.S. trading after its fiscal Q2 results showed another quarter of growth and solid profitability along with steady subscriber additions.
- On a GAAP basis, EPS of ¥38.22 beat an expected ¥34.54. Revenue grew 3.7% to ¥1.14T (about $9.5B) and beat an expected ¥1.127T. EBITDA of ¥378.7B beat an expected ¥368B.
- Revenue by segment (first six months): Telecommunications, ¥1.38T (down 0.8%); Equipment Sales, ¥416.8B (down 5.7%); Other, ¥415.8B (up 23.1%).
- Overall cellular subscriptions were up 6.5%, to 68.5M, of which 23.8B were new billing plans. Of those, 34.5M were LTE subscribers (up 31.6% Y/Y).
- Handsets sold were up 10% to 12.04M, and churn rate was flat at 0.58%.
- Aggregate average revenue per user slipped 1.4% to ¥4,100 (voice ARPU of ¥1,180, down 9.9%, and data ARPU of ¥2,920, up 2.5%).
- Form 6-K
Oct. 30, 2015, 7:23 AM
- NTT DoCoMo (NYSE:DCM): FQ2 EPS of ¥38.22.
- Revenue of ¥1.14T (+3.7% Y/Y).
Oct. 2, 2015, 2:27 PM
- NTT DoCoMo (DCM +0.2%) has a deal with KT Corp. (KT -0.9%) that makes it the first operator in Japan to offer outbound voice-over-LTE roaming.
- The service goes live Oct. 7, and nine smartphones in DoCoMo's new lineup will be compatible, though exact support for the devices remains to be seen.
- "Customers with compatible DoCoMo handsets will be able to make the same high-quality voice and video calls as in Japan using VoLTE to and from Japan, as well as in countries and regions capable of using the service," DoCoMo says.
- DoCoMo customers have placed 10M VoLTE calls using the company's domestic-Japan service since June 2014.
Sep. 14, 2015, 9:29 AM
- Japanese telecoms are slipping after Prime Minister Abe's urging that the industry should consider cutting mobile phone fees to reduce the burden on households.
- NTT DoCoMo ADRs (NYSE:DCM) are off 6% premarket, while No. 2 mobile firm KDDI (OTCPK:KDDIY) is inactive in U.S. trading but closed down 8.6% in Tokyo.
- Nippon Telegraph and Telephone (NYSE:NTT) is down 2.8% in the U.S. premarket after dropping 6.5 in Tokyo. SoftBank (OTCPK:SFTBY), meanwhile, was down 5.5% in Tokyo.
- KDDI had said it would lower fixed rates for voice -- a move that could hurt DoCoMo's profits by up to ¥250B if it matched that, says Mizuho's Kei Takahashi, downgrading DoCoMo to Underperform. “If it elects not to do so, we see an increased risk of subscriber outflow; a simplified calculation suggests the loss of 1 million subscribers would lower profits by at least 50 billion yen.”
Sep. 14, 2015, 9:14 AM
Sep. 11, 2015, 1:23 PM
- NTT DoCoMo (NYSE:DCM) is off 3.3% in U.S. trading after Mizuho downgraded the shares to Underperform.
- Most recently, Barclays had upgraded shares to Overweight last week.
- Shares have lost 11% over the past month after hitting a 52-week high on Aug. 10, but are still up 36% YTD.
- In its last earnings report, DoCoMo beat expectations while operational metrics grew across the board. The firm grew subscriptions by more than 6% while churn declined to 0.59%.
Jul. 29, 2015, 12:24 PM
- NTT DoCoMo ADRs (NYSE:DCM) are up 5.5% in U.S. trading after the Japanese mobile firm beat earnings expectations and grew subscribers, smartphone penetration and high-speed data in its Q2 report.
- On a GAAP basis, its EPS of ¥43.48 beat an expected ¥32.30. Revenue was flat and EBITDA of ¥380.97B was 8% better than an expected ¥352.85B.
- Revenue by segment: Telecommunications, ¥878.6B (down 3.1%); Smart Life business, ¥117.1B (up 17.5%); Other, ¥87.1B (up 14.7%).
- Overall, cellular subscriptions rose more than 6%, to 67.5M. The company said at quarter's end it had 32.6M LTE subscribers, up 35.6% Y/Y. Premium 4G service (LTE-Advanced) is now available in 292 cities in Japan.
- Handsets sold rose 11.8%, to 5.77M units. Churn rate was 0.59%, down from the prior year's 0.6%.
- Aggregate average revenue per user was ¥4,010 (down 4.8%). As part of that, Voice ARPU was down 16.4% to ¥1,120; Data ARPU was up 0.7% to ¥2,890; and Packet ARPU was flat at ¥2,870.
- Form 6-K
Jul. 29, 2015, 8:11 AM
- NTT DoCoMo (NYSE:DCM): Q2 EPS of ¥32.89
- Revenue of ¥1.07T (flat Y/Y)
Jul. 7, 2015, 3:58 PM
- GE (GE +0.6%) and NTT DoCoMo (DCM +0.1%) plan to team up to offer a new remote monitoring service for bridges and other structures in Japan, Nikkei Asian Review reports.
- The pair reportedly will offer Internet-based solutions to monitor the country's aging structures, which also includes roads, power transmission and other equipment.
- GE sensors would monitor such items as rotation, vibration, flow rates and temperature, transmitting the information via DCM's mobile network; the info would be analyzed to predict equipment trouble and notify clients of potential problems in advance to help save on maintenance costs.
Apr. 28, 2015, 5:04 AM
- NTT DoCoMo (NYSE:DCM): FY14 net income of ¥410.1B
- Revenue of ¥4.38T (-1.8% Y/Y)
- The company declared dividend of ¥65/share.
- The company expects operating revenues of ¥4.51T, net income of ¥470B, Adj. FCF of ¥400B for FY15.
- The company expects net adds of 3.3M subs, total handsets sold 24.1M units for FY15.
- The company plans to hike its annual dividend by 7.7% to ¥70.
Mar. 3, 2015, 7:06 PM
- With Mobile World Congress focusing lots of talk on the next generation of wireless radio technology -- 5G -- NTT DoCoMo (NYSE:DCM) is putting itself in the center, working with many firms in the space, in Asia and otherwise, to help define the standards and develop the tech.
- Recently the Japanese company announced a regional consortium with South Korea's KT Corp. (NYSE:KT) and China Mobile (NYSE:CHL). The three will share information to develop custom 5G tech for Asia, in a bid to get ahead of competitors in the U.S. and Europe.
- Today China's Huawei said it was teaming with DoCoMo for tests in both China and Japan. At MWC, Huawei announced plans to invest at least $600M on 5G research over the next three years.
- On Monday, Nokia (NYSE:NOK) said it was working with DoCoMo to develop high-frequency networks for 5G that could offer 2 Gbps speeds by tapping previously unused spectrum.
- DoCoMo is among the more conservative firms on 5G, expecting it to really arrive in 2020 (just in time for the Tokyo Olympics), with 2030 a target for major deployment.
- FCC Chairman Tom Wheeler says of 5G: "It is like going to the Picasso museum here in Barcelona and looking at a picture; I’ll see something different than you see," but agreement is crystallizing around goals: speeds of up to 10 Gbps, vs. 4G's theoretical 300 Mbps; latency of 1 ms, 500 times faster than current; green and sustainable; flexible; and secure.
NTT DoCoMo, Inc. engages in the mobile communications business. It operates through the following segments: Telecommunications, Smart Life Business, and Other Businesses. The Telecommunications segment provides mobile communication services, optical-fiber broadband and other telecommunications... More
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