(Silicon) Chips up for Tech and Telecommunications Sectors
by Anne Szustek
Tech and telecoms stocks continue to show recessionary steadfastness, with the latest good news coming from Virgin Mobile and Dish Network. Plus, Microsoft is launching its first-ever bond offering on the back of its top credit rating.
The April 24 edition of “Chin Up in the Downswing” profiled some tech and communications stocks that beat Q1 projections. Good news keeps coming from those sectors. The latest: the Kansas City Business Journal reports that cell phone service provider Virgin Mobile posted first-quarter 2009 revenues of $337.29 million, up from $330 million during the first three months of 2008, an increase of 2.2 percent year-on-year. Plus, the Warren, N.J.-based telecom posted $19.06 million in profits during the quarter, more than four times the $4.75 million in profit Virgin Mobile pulled in during the first quarter of 2008.
Satellite TV provider Dish Network’s first-quarter earnings went up 21 percent year-on-year this past quarter compared to the same period in 2008, pulling in $312.7 million, or $0.70 per share, over the $258.6 million, or $0.58 per share, during the first three months of last year. This was despite a net loss of some 94,000 subscribers during this time. According to The Associated Press, Dish Network’s positive numbers were due to a number of factors, including lower marketing costs to get new customers, higher subscription fees and more subscribers signing up for more expensive digital video recording and high-def TV services.
Perennial strong performer Microsoft is offering its first-ever bond issue, opening up $3.75 billion in low-risk debt securities to investors. The software maker, while seeing its stock price drop 34 percent during this past year, still has an outstanding credit rating. Bloomberg reports that in September Microsoft became the first new company in 10 years to get the top AAA debt rating from Standard & Poor’s, and also received the highest rating possible from rating agency Moody’s. In addition to underlining Microsoft’s relative buoyancy during this financial crisis, the bond issue also speaks to the strength of the capital markets: “The credit markets are alive and well,” Calamos Asset Management CEO John Calamos said in an interview with Bloomberg Television today.