Telecommunications firm M1 is expected to post lower net profit in the third quarter compared to the previous three months, but dividends should still be maintained, Maybank Kim Eng said.
By 10:31 a.m., M1 shares were up 0.4% at $2.66 and have gained 6.4% so far this year, compared to the FTSE ST Telecommunications Index’s 6% rise.
The brokerage forecasts M1 to report net profit of $33-34 million in the third quarter, as earnings before interest taxes depreciation and amortisation margin is expected to fall further quarter-on-quarter.
Margins may stay depressed in the fourth quarter from subsidies for iPhone 5, but will see an improvement in the subsequent quarters, Maybank said.
Although positive catalysts are limited for M1, with dividends likely to be maintained at 2011 level of $0.45 a share, the stock’s yield of 5.5% should limit downside, Maybank said.
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