United Internet Gains on Forecast of Mobile-Internet Use
United Internet AG (UTDI) jumped to the highest in almost 15 years after raising its customer forecast for 2013 by 10 percent as the German online-access and domain provider sold more mobile-Internet contracts in the first half.
United Internet rose as much as 6.8 percent and was trading up 5.3 percent at 25.80 euros as of 2:23 p.m. in Frankfurt, the highest based on closing prices since at least October 1998. Trading volume exceeded the three-month daily average by 41 percent. The stock has gained 58 percent this year, valuing the company at 5 billion euros ($6.63 billion).
“We now expect a number of approximately 1.1 million new contracts, which means 100,000 contracts more than previously estimated,” Ralph Dommermuth, chief executive officer of United Internet, said today in a statement. The first-half figure rose 22 percent from a year earlier to 330,000 new mobile-Internet subscriptions. Including customers seeking website-hosting services, new contracts in the first half totaled 660,000.
“It was positive that the company raised its forecast for customer growth,” said Adrian Pehl, a Frankfurt-based analyst at Equinet AG. Achieving the target “shouldn’t be a problem, given the number reached in the first half.”
Earnings before interest, tax, depreciation and amortization stood at 175 million euros in the first half. The Montabaur-based company said it’s sticking to earnings forecasts. United Internet predicted in May that Ebitda from “established” businesses will amount to 500 million euros this year.
A joint project with phone operator Deutsche Telekom AG (DTE) to provide legally secure e-mail accounts within Germany, called De-Mail, received 280,000 contracts as of June 30 after winning regulatory accreditation in March, United Internet said. The company said it’s focusing on expanding its business-applications web-domain operations abroad.
“We see more growth in the medium term in applications due to do-it-yourself, De-Mail and foreign hosting markets,” said Pehl, who has a hold recommendation on the stock and who called the full-year earnings target “ambitious.”
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