Earning Release

Fresenius Medical Care AG & Co. KGaA (NYSE:FMS), reported 3Q 09 results, which were in line with our expectations. Its revised guidance for FY 2009 also falls within our expectations. Therefore, our outlook for the company remains broadly unchanged. However, the current price level supports a HOLD rating for the ADR. Hence, we downgrade the ADR from a BUY to a HOLD. We will reassess our target price and rating in our 3Q 09 update report. We are likely to revert to a 6-24 month investment horizon as we now anticipate a marginal positive currency impact on the European stock over the long term1. Considering our fundamental outlook, we downgrade the stock from a BUY to a HOLD at current levels. We will reassess our target price and rating in our 3Q 09 update report.

While Philippine Long Distance Telephone Company’s (NYSE:PHI) 9M 09 revenues were in line with our estimate, operating and adjusted1 net margins were marginally below our estimates. Growth in revenues was supported by moderate performance from all three segments, whereas operating and adjusted net margins were below our estimates due to higher-than-expected Depreciation and Amortization (D&A) expenses, partially offset lower-than-expected net finance costs. In light of mixed 9M 09 performance, coupled with our anticipation of declining ARPU, reflecting increased competition in the region and current price levels we maintain our HOLD rating on the common stock. We will reassess the common stock rating for PLDT in our 9M 09 update report. As we continue to anticipate a significant negative currency impact on the ADR over the next 6-12 months and given current price levels, we reiterate our SELL rating for the ADR. We will reassess our target price and rating in our 9M 09 update report.

Itau Unibanco Banco Multiplo S.A. (NYSE:ITUB) reported robust top-line, exceeding our expectations. However, bottom-line was closer to our expectations. Although the bank also reported a significant y-o-y rise in its provision expenses due to rising defaults, based on better-than-expected results and signs of economic recovery, we expect to revise our target price and estimates upwards in our next update report. In light of this, although the current price does not support a BUY rating, we upgrade the preferred stock from a HOLD to a BUY. We will reassess our preferred stock rating and target price in our next update report. Although we expect to increase our preferred stock target price in our next update report, as we continue to anticipate a negative currency impact on the ADR over our investment horizon, we maintain our HOLD rating for the ADR. We will reassess our ADR (1 ADR = 1 preferred share) rating in our next update report.

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