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 Latin American telecom NII Holdings (NASDAQOTH:NIHDQ) have lost over 9% today after the company provided weak revenue estimates for its 2013 fiscal year.
So what: Analysts had been looking for $6.1 billion in annual revenue, but today's guidance fell well below that mark, as NII projects it will generate between $5.7 billion and $5.9 billion on the top line this year. A relatively lowball estimate of mid-single-digit subscriber growth from the current 11.4 million total didn't impress the Street, either -- at 5% growth, that brings the total up to 12 million, which would be a little less than the 650,000 net subscribers added in 2012. Slowing growth is not a good sign.
Another report that NII was planning to raise an additional $400 million in debt offerings did nothing for the market, which is growing impatient with NII's tough uphill battle against Latin American telecom leaders America Movil and Telefonica.
Now what: There are many telecoms on the market that provide both a large, stable customer base and a large, stable dividend. NII offers neither, and despite its rock-bottom share price (the lowest in nearly a decade), NII has offered no clear path forward for investors. If you're looking for a telecom turnaround story, this doesn't look like the one to stand behind.
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