NII Downgrade… Nextel Issues Carry Over Into Latin America (NIHD, S)

NII Holdings, Inc. (NASDAQ: NIHD) cannot seem to catch a break.  Apparently the “Nextel” brand is not doing any better in Latin America compared to the United States.  Does this sound a bit like the same woes for Sprint Nextel Corporation (NYSE: S) in the United States? Zacks Investment Research downgraded the rating on NII Holdings down to a very negative Underperform rating and said “the company s nightmare will continue in the near future” after a dismal earnings report before.

Another negative is that the management team of NII Holdings has really softened up on the company’s outlook for the full year.  This is said to be “mainly driven by the volatile macro-economic condition coupled with significant depreciation of several Latin American currencies in comparison with U.S. dollars.”  There is also stiff competition that is reducing the outlook in Latin America.  There is also the fear of rising promotional expenses eating into earnings.

ZACKS FULL REPORT

What was not a focus of the downgrade, but something which needs to be considered, is that the Nextel brand is just not what it used to be.

All investors have to do is to watch the stock’s reaction here… A new year low.  After a 1.3% drop to $19.12 and a low of $18.95 listed as the low this morning, the prior 52-week trading range was $19.18 to $44.21. 

JON C. OGG