Investors sell on Globe’s third-quarter income, full-year profit estimate

INVESTORS sold Globe Telecom, Inc.’s stock last week after the release of the listed telecommunication company’s double-digit profit growth in the third quarter, analysts said.

Data from the Philippine Stock Exchange show 220,890 shares worth P491.84 billion were traded from Nov. 14 to 18. Shares in the Ayala company went down by 3.7% to close at P2,214 apiece on Friday. Year to date, the stock has gone down by 33.4%.

Globe released its third-quarter income on Nov. 14 showing a 38.6% increase to P6.82 billion from P4.92 billion in the same quarter a year ago. Year to date, its income reached P26.5 billion, a 47.6% increase from P17.96 billion in the same period in 2021.

Analysts said that Globe’s income report largely moved the stock last week.

In an e-mail, Regina Capital Development Corp. Equity Analyst Anna Corenne M. Agravio said that investors sold the stock after the release of its quarterly financial report.

Papa Securities Equities Strategist Manny P. Cruz said that Globe’s quarterly report is in line with its growth estimate and the consensus estimate for the stock.

In a Viber message, he said third-quarter service revenues declined 2% quarter on quarter and increased 3% year on year, led by weaker mobile and home broadband segments.

He said service revenues experienced weaker prepaid average revenue per user of minus 2% quarter on quarter, with mobile subscriber growth coming in flat.

“Additionally, [Globe’s] home broadband continued its decline as overall subscribers declined 13% [quarter on quarter] with the wireless segment’s 23% decline more than offsetting the 7% gain in fixed broadband subscribers,” he added.

In an emailed analysis to reporters on Nov. 16, financial research firm CreditSights, Inc. said that the telecommunication arm of Ayala Corp. is on track to meet its earnings target this year supported by “sustained subscriber demand and further moderation of fuel prices.”

The financial research firm called Globe “stable” based on its year-to-date financial results.

“This will definitely appeal to investors, as its operations are considered defensive against the volatile markets. Barring one-offs, GLO should be able to sustain its revenues for the remainder of the year since demand for data-related services is expected to remain stable,” Ms. Agravio said, referring to Globe’s stock symbol.

She placed her estimate for the stock’s fourth-quarter income at P5 billion to P6 billion, while its full-year income at P30 billion to P32 billion.

For the week, Ms. Agravio placed her support and resistance levels at P2,200 and P2,350, respectively. — Bernadette Therese M. Gadon