Iliad shares drop 4 pct as mobile phone growth slows

PARIS (Reuters) - Shares in France's Iliad fell more than 4 percent after the low-cost telecoms operator founded by billionaire Xavier Niel reported slower growth at its mobile phone business Free.

Iliad said the number of new mobile customers fell to 640,000 in the third quarter from 720,000 in the second, suggesting that a price war with more established mobile operators is making it harder for Iliad's Free Mobile service to lure away their customers.

It was the slowest quarterly increase in customers for Free Mobile since its launch, although the third quarter is traditionally a slower period.

Some analysts had anticipated the slowdown and had expected Iliad to launch a new commercial formula to boost sales.

"Be patient. We will launch new offers in the months ahead, when the time is right," Iliad finance chief Thomas Reynaud told Reuters.

Iliad said in a statement that Free had 7,435,000 mobile customers at the end of September, for a mobile market share of more than 11 percent, up from 10 percent at the end of June.

Mobile now generates a third of the company's revenues, which rose 23 percent to 2.77 billion euros ($3.73 billion) in the January-to-September period.

Third-quarter revenue was up 15 percent to 944 million euros. Analysts from Barclays, Credit Suisse and JP Morgan had expected quarterly revenue of between 927 and 935 million euros.

"These solid results demonstrate Iliad's ability to deliver results, even if does not beat expectations by as much as in earlier quarters," a Paris-based trader said.

Free's no-frills deals - which cost 2 euros or 19.99 euros a month without a phone or long-term contract - have forced larger competitors France Telecom, Vivendi's SFR and Bouygues Telecom to cut costs to compete and accelerate construction of superfast 4G networks to offer a better service than Iliad.

"When the time is right, we too will offer 4G," Reynaud said, adding that competitors' 4G launches had no impact on Free mobile's growth.

Shares in Iliad are up nearly 30 percent this year, after a 36 percent rise last year, and are in line with a broader rally by a European telecoms sector index this year.

The company has a market capitalization of 9.7($1 = 0.7430 euros)

(Writing by Geert De Clercq; Editing by Mark Potter and Tom Pfeiffer)

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Cisco shares drop 13 percent after revenue warning

n">(Reuters) - Cisco Systems Inc's shares fell as much as 13 percent on Thursday after the network equipment maker forecast a steep drop in revenue for the current quarter, prompting at least 17 brokerages to cut price targets on its stock and two to downgrade their ratings.

Cisco said on Wednesday it expected an 8-10 percent drop in revenue in the current quarter after lower sales to telecom and cable service providers and in emerging markets hurt its results in the quarter ended October 26.

Analysts cut their price targets on Cisco's stock by as much as $6 to a low of $20.

Cisco shares were trading at $21.00 in late morning trading on the Nasdaq. About 140 million shares had traded by 11:13 a.m. ET.

Goldman Sachs was among the brokerages that cut its target price, to $25 from $30.

Goldman also removed the stock from its Conviction List of top picks, citing "reduced confidence in the near-term trajectory", but Goldman analysts maintained their "buy" rating.

Cisco's revenue warning comes after former U.S. spy agency contractor Edward Snowden exposed widespread surveillance by the National Security Agency through internet data, much of which is transmitted via Cisco's equipment.

Cisco's chief financial officer, Frank Calderoni, told analysts the company had been affected by a political backlash in China, but said it was difficult to quantify how much of its revenue shortfall was a result of this.

In a note titled "An outlook to make even mom look twice", RBC Capital Markets analyst Mark Sue said the China issue might linger for a while. Sue cut his price target on the stock to $22 from $24, maintaining a rating of "outperform".

"While our checks noted emerging markets weakness, we were clearly wrong on magnitude of the order weakness," Deutsche Bank analyst Brian Modoff said in a note.

Modoff downgraded Cisco's stock to "hold" from "buy", and cut his price target to $25 from $28.

Analysts said Cisco faced stiff competition from companies such as Aruba Networks Inc, Alcatel-Lucent SA, Brocade Communications Systems Inc, Ciena Corp, F5 Networks Inc, Riverbed Technology Inc and Juniper Networks Inc.

However, shares of these companies also fell on Thursday, along with those of optical component makers JDS Uniphase Corp and Finisar Corp, which supply Cisco.

Credit Suisse analyst Kulbinder Garcha said Cisco looked increasingly vulnerable to technological innovations and competitive pressures. Garcha cut his price target to $20.

(Reporting by Neha Alawadhi in Bangalore; Editing by Kirti Pandey and Ted Kerr)

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Cost to borrow Twitter shares drops, interest wanes

NEW YORK Thu Nov 14, 2013 3:23pm EST

The Twitter logo is displayed on the floor of the New York Stock Exchange, November 8, 2013.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - The cost to borrow Twitter's stock dropped further on Thursday thanks to a growing supply of shares available for loan, including to traders looking to bet on a decline in the share price, data showed on Thursday.

Investors searching to borrow Twitter must pay nearly 5 percent on an annualized rate, down from a peak near 20 percent the day before and after ending Wednesday close to a 13 percent rate, according to the latest available data from SunGard's Astec Analytics.

About 9 million shares were out on loan including the 5.5 million total borrowed to late Wednesday.

"Today's numbers are showing a cooling off," said Timothy Smith, executive vice president at Astec Analytics.

"This interest would appear to be getting smaller minute by minute."

Utilization of available supply at the end of the day Wednesday was close to 37 percent, he said.

Short sellers borrow shares and sell them in the expectation of a price drop, after which they buy them back at a lower price, return them to the lender, and pocket the difference. Shorting is also used as a hedging strategy.

Twitter shares rose 4.7 percent in afternoon trading on Thursday to $44.60, about 71 percent higher than the IPO price of $26. The stock debuted on the New York Stock Exchange at $45.10 a week ago and touched a high of $50.09 on that day.

Buy or hold recommendations from research analysts on Wall Street outnumber advice to sell Twitter shares by 11 to two according to Reuters data. Price targets on the shares range from $20 to $54.

(Reporting by Rodrigo Campos; Editing by Leslie Gevirtz)

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