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TNS Inc. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: March 16, 2011 10:26PM
TNS Inc. (TNS) filed Annual Report for the period ended 2010-12-31. Tns Inc. has a market cap of $392.6 million; its shares were traded at around $14.98 with a P/E ratio of 7.5 and P/S ratio of 0.7. Tns Inc. had an annual average earning growth of 11% over the past 5 years.
Highlight of Business Operations:
Our business began operations in 1991 to address the needs of the Point-of-Sale industry in the United States. The strong operating cash flows generated by our business have enabled us to invest in our data network to make our communications services more rapid, secure, reliable and cost efficient. In addition, we have leveraged these investments and used our continued strong operating cash flows to expand our service offerings to related market opportunities in the telecommunications and financial services industries in the United States and abroad. By implementing and executing this strategy, we have grown our revenues every year, from $285,000 for the year ended December 31, 1991, to $527.1 million for the year ended December 31, 2010.
SS7 networks are data networks that transport call-signaling information separate from the public switched telecommunication network over which the call content is communicated. Communication service providers require access to an SS7 network connected to the signaling networks of other carriers to be able to provide telecommunication services to their customers. In addition to circuit set-up and tear-down, wireless operators use SS7 signaling to locate and authenticate subscribers, to determine service parameters, and to update location registers. According to Pyramid Research, the market for telecommunication services is expected to grow at a compound annual growth rate, or CAGR, of 2.5% from 2009 to 2014, with most of the growth being attributed to mobile data and IP-based networks. Voice over IP, or VoIP, is expected to grow at a compounded annual growth rate of 18.4% from $8 billion in 2008 to $22 billion in 2014. Mobile broadband is anticipated to be a further source for growth for the United States telecommunications market due to growing popularity of unlimited data and mobile broadband plans. Revenue related to mobile broadband access for laptop computers and Internet access for handsets is estimated to grow rapidly at CAGRs of 28% and 18%, respectively, from 2009 to 2014.
An opportunity related to the telecommunications industry's evolution to the next generation of Internet protocol, or IP, based networks is the growth of data usage by operators' subscribers. According to Pyramid Research, the telecommunications market in the United States is expected to reach $406 billion in 2014, with mobile data revenue climbing to $94 billion, surpassing fixed voice during the forecast period. This growth is expected to create opportunities associated with the interconnections needed between communication service providers to enable seamless data roaming between disparate operators and networks, and from the focus on applications to drive increased revenue per customer via value-added applications. Additionally, the network evolution of both fixed and mobile service providers next generation networks is expected to provide market participants with new opportunities as the operators will need to extend the life of their current infrastructure in order to experience the benefits of next-generation IP networks.
A component of the growth in overall payment transactions is e-commerce. JPMorgan estimates that global e-commerce revenue in 2011 will grow to $680 billion, up 18.9% from 2010 revenue. e-commerce in the U.S. alone is projected to grow 13.2% to $187 billion, and it is forecasted that global e-commerce revenue will reach $963 billion by 2013. From a transaction perspective, the U.S. e-commerce market is expected to grow at a three year CAGR of 8.6% from 2010 to 2013, with transactions growing from 4.3 billion in 2010 to over 5.5 billion in 2013.
Stocks Discussed: TNS,