Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Hey, telecom service and equipment providers... nobody likes you! That's the reverberating sentiment on this notably strong up day for the market as service providers Leap Wireless
So what: For Inteliquent, which missed EPS estimates by $0.07 and guided full-year sales well below Wall Street's forecasts, it blamed slowing sales from telecom companies. Leap Wireless, which operates the Cricket service and is the sixth-largest wireless provider in the nation, reported a nearly 290,000 drop in subscribers as promotional efforts failed miserably. NII Holdings, which provides wireless services in Central and South America, slashed its full-year forecast as unfavorable currency translations, lower average revenue per user, and higher costs associated with its 3G network rollout are crushing its bottom line.
Now what: Yuck... E.T., the telecom industry needs you! Really, what the telecom industry needs is for big telecoms Verizon and AT&T
Personally, I'm one of the few people that is intrigued by the attractive valuations in the telecom sector, but I much prefer equipment providers than service providers. Inteliquent is once again looking attractive, while Leap and NII Holdings deserve to be wrapped up in layers of yellow caution tape.