euphoria proves to be elusive at pccw despite dividend payout tonic
The satisfaction for PCCW shareholders lasted less than 16 hours. As with Viagra, the tonic of the firm paying its first dividend was fleeting. Having coughed up 5.5 cents per share pay-out, the stock promptly fell 35 cents. Who says money can buy you love (or even staying power)!
Once again, Lai See's IR Index correctly predicted premature-earnings-euphoria-evaporation on the basis that PCCW's stock has fallen three in four times after reporting results.
The morning after, brokerages were fretting over a 23 per cent decline in profits (before other stuff), pointing to higher customer retention costs and poor cost cutting.
Certain doubting wags in the Hong Kong government yesterday wondered if that were the only story. After all, PCCW spent most of last year in court fighting its regulator at every turn. Lai See is told it has up to 18 in-house lawyers, enough to staff the average mid-sized law firm in Hong Kong.
When it did secure a courtroom victory, a company insider somewhat churlishly admitted the effect was 'insignificant'. Here's a radical idea, suggest some government types: stop whingeing and get down to business.
