ATLANTIC TELE-NETWORK $70.10 - Nasdaq symbol ATNI

ATLANTIC TELE-NETWORK $70.10 (Nasdaq symbol ATNI; TSINetwork Rating: Speculative) (340- 777-8000; www.atni.com; Shares outstanding: 15.9 million; Market cap: $1.1 billion; Dividend yield: 1.7%) owns wireless and wireline telecom operations in the U.S. Southwest, New England, New York State, Guyana, Bermuda and parts of the Caribbean islands.

The company continues to improve its technology and expand its wireless capacity and coverage. That’s paying off as customers use more mobile data for profitable services like music downloads and gaming.

Big departure from telecom

Atlantic recently entered the solar energy market by acquiring 28 solar farms in Massachusetts, California and New Jersey. The company paid $103 million for these assets ($64 million in cash and the assumption of $39 million of debt).

Before the purchase, Atlantic held cash of $395.6 million, or $24.87 a share, and had no debt, so it could easily afford this deal.

In the quarter ended December 31, 2014, revenue rose 14.9%, to $88.5 million from $77.0 million a year earlier. Earnings fell 29.0%, to $11.5 million, or $0.72 a share, from $16.2 million, or $1.02. However, the current quarter included $2.6 million of costs related to the solar-power purchase, and the year-earlier quarter included an $8.4-million income tax benefit.

The company plans to use some of its cash to further expand in renewable power. That adds diversification, but entering markets outside its telecom expertise also adds risk. Meanwhile, the stock trades at a high 21.9 times its forecast 2015 earnings of $3.20 a share.

Atlantic Tele-Network is a hold.

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