UPDATE 3-Strong subscriber additions, revenue lift NII shares

* Q1 EPS $0.28 vs $0.43 year ago

* Revenue up 33 pct at $1.28 bln, beats est of $1.26 bln

* Operating expenses up 32 pct

* Shares rise 10 percent
(Adds analyst comment, details)

By Saqib Iqbal Ahmed and S. John Tilak

BANGALORE, April 29 (BestGrowthStock) – Latin American wireless
carrier NII Holdings Inc’s (NIHD.O: ) quarterly revenue jumped
nearly a third and beat market estimates on strong subscriber
additions, sending its shares up 10 percent.

For the first quarter, net subscribers added were 377,000,
bringing its subscriber base to 7.7 million, up 20 percent from
a year ago.

After being hit acutely by the economic slowdown, NII has
bounced back, recording at least five straight quarters of
market-beating revenue and EBITDA.
“It was almost a picture-perfect quarter in our mind.
Certainly it’s still very much a subscriber story, a growth
story,” Stifel Nicolaus analyst Christopher King said.

“The subscriber trends continue to look very good from a
net adds standpoint – some of that is a function of the lower
churn levels.”

NII, which targets business customers in Mexico, Brazil,
Argentina, Peru and Chile under the Nextel brand, said churn
rate — a measure of customer attrition — was 1.69 percent, an
improvement of 42 basis points when compared with a year ago.

“Our first quarter consolidated monthly churn rate of 1.69
percent was the primary factor driving the sequential increase
of net adds during the first quarter,” Chief Financial Officer
Gokul Hemmady said on a conference call with analysts.

The numbers show that the company has been holding its own
against rivals in the high-growth, but very competitive, Latin
American market.

Reston, Virginia-based NII competes with Mexican mobile
operator America Movil (AMX.N: ) (AMXL.MX: ) — controlled by
billionaire Carlos Slim — and Spanish telephony giant
Telefonica (TEF.MC: ).

Despite the strong performance, NII did not increase its
outlook for the year.

“We feel that our results position us well to meet or
exceed our guidance,” Chief Executive Steve Dussek said on the
call.

“We’re going to keep focused on delivering those kind of
results in the second quarter and beyond, and if warranted,
we’ll come back in the second quarter and address guidance,” he
added.

Stifel’s King expects the full-year forecast to be boosted
in the course of the year.
“You’ve got the currencies that are going in their favor as
well. That’s going to be another added impetus for people to
increase numbers.”

NII reported operating income before depreciation and
amortization of about $341 million, up 39 percent.

The company’s consolidated average monthly service revenue
per subscriber was $47, up $5 from the year-ago period due
primarily to strengthening of local currencies.

Nextel Brazil grew its subscriber base by 37 percent
compared to a year ago, while more than doubling its segment
earnings, the company said. Operating revenue from Nextel
Mexico rose 15 percent to $509.4 million.

NII plans to continue expanding its business by investing
in additional network coverage and capacity, and by adding
capabilities through investments in spectrum and 3G networks.

NII’s first-quarter profit (Read more your timing to make a profit.), however, missed analysts’
expectations, hurt by higher expenses.

Net income fell to $48.5 million, or 28 cents a share, from
$70.6 million, or 43 cent a share, a year earlier.

The company said first-quarter results include $25 million
of pretax foreign currency (Read more about trading foreign currency. transaction losses.

Consolidated operating revenue rose 33 percent to $1.28
billion thanks to strong subscriber additions, topping
analysts’ expectation of $1.26 billion, according to Thomson
Reuters I/B/E/S.

According to Thomson Reuters data, excluding forex losses,
the company’s earnings were 35 cents a share compared with
analysts’ expectation of 50 cents a share.

Operating expenses rose 32 percent to $1.07 billion.

NII shares, which have more than doubled in value over the
last one year, were up 9 percent at $42.50 in midday trade
Thursday on Nasdaq. They touched a high of $42.81 earlier in
the day.

Money

(Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by
Saumyadeb Chakrabarty, Ratul Ray Chaudhuri)

UPDATE 3-Strong subscriber additions, revenue lift NII shares