Why NII Holdings Shares Sank Again

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: Shares of NII Holdings (Nasdaq: NIHD  ) , the mobile phone carrier that offers service under the Nextel brand in Brazil, plunged 10% today after the company's quarterly results missed Wall Street expectations.

So what: NII shares have been slaughtered over the past year as the rollout of its 3G network has struggled to gain traction, and today's third-quarter results -- per-share loss of $0.48 from a breakeven quarter in the year-ago period while revenue fell 15% -- suggest that things are only getting worse. In fact, the company's Brazilian subscriber base fell by 92,000 customers during the quarter, reinforcing serious concerns over intensifying competition and its seemingly out-of-date technology.

Now what: Moving forward, management will continue to eliminate expensive and difficult-to-retain customers in Brazil. "While this plan will mean that churn will rise substantially for the fourth quarter of 2012, causing us to fall well below our consolidated net addition goals for the year, it will position Nextel Brazil to return to positive net add growth in the first quarter of 2013, with a higher-quality subscriber base," CEO Steve Dussek reassured investors. "Executing this strategy is the right decision for the business in the long term." Given just how rapidly NII's expenses, cash burn, and debt load are growing, however, the short-term risks are just too serious for average Fools to take on.

Interested in more info on NII Holdings? Add it to your watchlist.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2100527, ~/Articles/ArticleHandler.aspx, 10/23/2016 10:06:06 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
NIHDQ $0.00 Down +0.00 +0.00%
NII Holdings, Inc. CAPS Rating: **