) to strong buy from outperform.
Analyst Mike Latimore says after a review of U.S. wireless capital spending, and a review of minutes-of-use results and the outlook, he's more confident in Tekelec's ability to post strong second-half 2003 results. He notes about 50% of Tekelec's systems revenue comes from the U.S. wireless market.
Latimore says the top six U.S. operators will spend approximately 41% more in the second half of the year on capital spending than in the first half, while Tekelec's three largest customers (AT&T Wireless, Cingular, and Verizon) will spend about 55% more.
Given the strong subscriber and usage growth reported this quarter, he upped the 4% minutes-of-use growth estimate to 16%. Latimore sees 29 cents 2003 earnings per share, 40 cents 2004 earnings per share, and 25% upside to his $18 target.