CEL - Cellcom Israel - net profit margin is 14.4% compared to the industry average of 3.34%

Cellcom Israel Ltd. (CEL) shares have been rallying for the last two weeks after briefly dipping lower and trading beneath the $30 mark. With this stock trading above $34, it is now once again in range to challenge the 52-week and all-time high just above $35. The fundamentals support the share growth trajectory, with the company reporting excellent full-year and fourth-quarter results on Mar 18. In addition, estimates continue to rise. The current-year estimate has tacked on six cents in just the last 30 days, moving to its current projection of $2.41 per share.

Cellcom Israel Ltd. is an Israeli based cellular service provider with over 3 million subscribers. The company was established in 1994, was listed on the New York Stock Exchange in 2006 and carries a market cap of $3.25 billion.

Strong Fourth-Quarter and Full-Year Results

Cellcom reported very strong fourth-quarter and full-year results on Mar 18 that demonstrated this company's strong growth trajectory.

Fourth-quarter revenue was up 10.7% from the same period last year to $412 million. Net income jumped 31.7% to $48 million, producing earnings of 49 cents per share, well ahead of analysts expectations who were looking for earnings of 42 cents per share. This marks the fourth time in four quarters that Cellcom has surprised and beaten analyst estimates, having done so by an average of 15 cents, or 38%.

Full-year fiscal 2007 revenue was up 7.6% to $1.573 billion. Full-year net income grew 56.2% to $227 million, producing earnings of $2.33 per share.

Cellcom crossed the three million customer mark in 2007, making it Israel's largest cellular provider. The company also noted that much of its growth in profitability was driven by a 12% increase in airtime minutes, higher revenues from content services as well as ongoing cost efficiencies.

Stock Performance

This company also stacks up very well against its industry competition in both ROE and profit margin. Its net profit margin is 14.4% compared to the industry average of 3.34%.

As previously mentioned the company's stock price has been accelerating in the last two weeks after temporarily taking a breather and dipping below the $30 mark. Since then, shares have trade above $34, a very nice short-term gain of more than 13%.

Moving forward, the key to the chart is the 52-week and all-time high just beyond $35. With shares being reinforced by the fundamentals, and a nice short-term up trend very much in play, this stock looks well positioned to challenge its peak and advance into higher territory.

Content Courtesy: Zacks Investment Research

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