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Mobile TeleSystems Swings To Net Loss In 1Q

The telecom company's latest quarterly earnings missed the consensus estimate.

Once these most recent quarterly results are finalized, they will be run through Ratings' model and our ratings will be adjusted accordingly. To keep up to date on all of our ratings, visit Ratings Screener.

On May 22, 2009,

Mobile TeleSystems

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reported a net loss in its Q1 FY09 earnings, hurt by translation losses that affected the company's dollar denominated results. Net loss stood at $57.72 million or $0.00 per share from a profit of $610.15 million or $0.31 per share in Q1 FY08. The latest quarterly earnings missed the most recent consensus estimate of $0.77 per share.

Net operating revenue plunged 24.0% to $1.81 billion from $2.38 billion a year ago, primarily due to local currency depreciation and seasonal factors. Service revenue and connection fees fell 25.0% to $1.78 billion. However, sales of handsets and accessories surged 398.0% to $28.31 million. Geographically, in local currency terms, revenue from Russia grew 7.5% to Russian ruble (RUB) 46.86 billion, revenue from Uzbekistan rose 28.1% to $101.70 million and Turkmenistan revenue also increased 69.7% to Turkmen Manat (TMT) 93.00 million. Additionally, revenue from Armenia edged up 5.0% to Armenian Dram AMD 17.85 billion. On the flip side, revenue from Ukraine declined 9.3% to Ukrainian Hryvnia (UAH) 1.87 billion.

In Q1 FY09, the company's total subscribers increased 8.7% to 96.61 million from 88.88 million in Q1 FY08. The increase was mainly led by a rise of 8.7% in its Russian base, a 67.7% expansion in the Uzbekistan subscriber base, a 44.4% surge in Armenian subscribers and an increase of 138.3% in its subscribers in Turkmenistan.

During the quarter under review, the company acquired a 100.0% stake in Eldorado Centr LLC and Eldorado Communications Store LLC for $22.85 million, of which $5.00 million will be paid after 12 months based on certain performance criteria. Mobile TeleSystems also acquired Telefon.Ru, a mobile retailer.

Recently, Mobile TeleSystems announced that it recommended the approval of an annual dividend of RUB 20.15 per ordinary Mobile TeleSystems (MTS) share or approximately $2.96 per ADR.