Globe seen meeting 2002 profit estimate

Globe Telecom Inc, the second largest telephone firm in the country, is on track to meet or exceed most market estimates for 2002 after posting third-quarter net income that was higher than expected, analysts said yesterday.

The company announced it had posted third quarter net income of P1.3 billion, slightly ahead of its earlier projection of about one billion. It reported net income of 804.595 million in the third quarter of 2001.

During the period it announced a hefty provision of P2.2 billion to cover the writedown of assets associated with the integration of its cellular operations with unit Isla Communications (Islacom).

After adjustments, however, it said the net impact on its bottom line would only be about P200 million.

Globe led the gainers in the stockmarket on Wednesday, to close up P10, or 2.5 percent, at P410. The main index ended up 0.27 percent.

Analysts estimated full-year net income of between P5.8 billion and P6.9 billion and said earnings to date put the company on track to meet those projections.

"The number puts them in line if not above what I am looking for," said Philippine Equity Partners research head Jojo Gonzales, who has picked full-year earnings of P5.8 billion.

Multex Global Estimates directory has a consensus forecast for full-year net profit of P6.314 billion on earnings per share of P42.29. In 2001 the company posted net income of P4.30 billion.

The fourth quarter is traditionally strong, with revenues up on extra phone use during the busy Christmas season.

Analysts said they had been surprised by the strong uptick in net wireless subscriber additions in the third quarter, considering the slight downtrend the overall industry has seen earlier in the year.

The firm added a net 524,000 new subscribers in the third quarter, up from 446,000 in the second and 417,000 in the first.

"I think that’s a good number considering we have seen a slowing trend overall recently," BPI Securities telecom analyst Roberto Cano said.

The Philippines has chalked up some of the fastest growth in cell phone use in the world over the past two years. While analysts could not immediately pinpoint the reason for the subscriber growth, Gonzales said he suspected it may have been driven by Islacom’s popular Touch Mobile voice-based service.

Globe, including Islacom, controls around 43 percent of the country’s wireless market, while bitter rival Smart Communications, a unit of Philippine Long Distance Telephone Co. has roughly the same share.

Analysts said PLDT, due to report third-quarter results next Tuesday, was also expected to post higher net income in the three-month period, but with earnings overshadowed by a slowdown in new subscribers and an ownership row.

For the first nine months, Globe, controlled by local conglomerate Ayala Corp, Singapore Telecommunications and Deutsche Telekom AG, said its net profit reached P4.3 billion versus P3.35 billion a year ago.

Revenue for the nine months was a record high P33.2 billion, the company said, up 34 percent on the year.

President and CEO Gerardo C. Ablaza Jr, said in a statement the third-quarter growth made Globe "optimistic about the general outlook for the wireless market and the prospects for our company’s continued strong performance." – Mary Ann Reyes