Sprint Corporation (S - Free Report) reported healthy first-quarter fiscal 2018 results, wherein both the top line and the bottom line surpassed the respective Zacks Consensus Estimate.
Net Income
Quarterly net income fell to $176 million or 4 cents per share from $206 million or 5 cents per share in the year-ago quarter, primarily due to higher operating expenses. However, reported earnings beat the Zacks Consensus Estimate by 5 cents.
Sprint Corporation Price, Consensus and EPS Surprise
Revenues
Total net operating revenues decreased to $8,125 million from $8,157 million in the year-ago quarter due to unstable revenue trends. The top line, however, beat the Zacks Consensus Estimate of $8,044 million. Service revenues were $5,740 million, down from $6,071 million in the year-ago quarter. Equipment sales totaled $1,173 million, down from $1,187 million. Equipment rentals increased to $1,212 million from $899 million.
Segmental Performance
Total net wireless operating revenues were $7,845 million compared with $7,810 million in the year-ago quarter. Postpaid revenues totaled $4,188 million and prepaid revenues were $982 million. Wholesale, affiliate and other revenues were $290 million.
Operating income was $1,002 million compared with $1,178 million in the year-ago period as the company battled intense price wars amid cut-throat competition. Adjusted EBITDA was $3,318 million compared with $2,866 million in the year-ago quarter. Adjusted EBITDA margin improved to 60.8% from 50.1% in the prior-year quarter.
Net operating wireline revenues were $338 million compared with $433 million a year ago. Operating loss for the segment was $96 million compared with a loss of $67 million in the year-ago period. Adjusted EBITDA was a negative of $42 million compared with a negative $11 million in the year-ago quarter. Adjusted EBITDA margin was a negative 12.4% compared with negative 2.5% in the prior-year quarter.
Operating Metrics
Total net operating expenses increased to $7,310 million from $6,994 million in the year-ago quarter. Operating income for the reported quarter was $815 million compared with $1,163 million a year ago due to higher operating expenses.
Overall adjusted EBITDA was $3,280 million compared with $2,853 million in the year-ago quarter and adjusted EBITDA margin improved to 57.1% from 47%.
Cash Flow
For first-quarter fiscal 2018, Sprint’s net cash provided by operations was 2,430 million compared with $1,924 million in the prior-year quarter.
Adjusted quarterly free cash flow was $8 million compared with $368 million in the year-ago quarter.
Liquidity
As of Jun 30, 2018, Sprint had $4,378 million of cash and cash equivalents with long-term debt, financing and capital lease obligations of $35,771 million.
Fiscal 2018 Guidance
Sprint has increased its adjusted EBITDA estimates on a reported basis to a range of $12 billion to $12.5 billion up from the previous guidance of $11.6 billion to $12.1 billion, due to impacts of the new revenue recognition standard.
Excluding the impact of the new revenue recognition standard, it expects fiscal 2018 adjusted EBITDA between $11.3 billion and $11.8 billion.
Cash capital expenditures, excluding leased devices, are projected in the range of $5 billion to $6 billion.
Zacks Rank & Stocks to Consider
Sprint currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader industry include Comtech Telecommunications Corp. (CMTL - Free Report) , Micron Technology, Inc. (MU - Free Report) and Motorola Solutions, Inc. (MSI - Free Report) . While Comtech and Micron sport a Zacks Rank #1 (Strong Buy), Motorola carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech has a long-term earnings growth expectation of 5%. It beat earnings estimates in each of the trailing four quarters, the average being 123.7%.
Micron has a long-term earnings growth expectation of 8.2%. It beat earnings estimates in each of the trailing four quarters, the average being 5.9%.
Motorola has a long-term earnings growth expectation of 8.5%. It beat earnings estimates in each of the trailing four quarters, the average being 12.1%.
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Sprint Corporation (S - Free Report) reported healthy first-quarter fiscal 2018 results, wherein both the top line and the bottom line surpassed the respective Zacks Consensus Estimate.
Net Income
Quarterly net income fell to $176 million or 4 cents per share from $206 million or 5 cents per share in the year-ago quarter, primarily due to higher operating expenses. However, reported earnings beat the Zacks Consensus Estimate by 5 cents.
Sprint Corporation Price, Consensus and EPS Surprise
Revenues
Total net operating revenues decreased to $8,125 million from $8,157 million in the year-ago quarter due to unstable revenue trends. The top line, however, beat the Zacks Consensus Estimate of $8,044 million. Service revenues were $5,740 million, down from $6,071 million in the year-ago quarter. Equipment sales totaled $1,173 million, down from $1,187 million. Equipment rentals increased to $1,212 million from $899 million.
Segmental Performance
Total net wireless operating revenues were $7,845 million compared with $7,810 million in the year-ago quarter. Postpaid revenues totaled $4,188 million and prepaid revenues were $982 million. Wholesale, affiliate and other revenues were $290 million.
Operating income was $1,002 million compared with $1,178 million in the year-ago period as the company battled intense price wars amid cut-throat competition. Adjusted EBITDA was $3,318 million compared with $2,866 million in the year-ago quarter. Adjusted EBITDA margin improved to 60.8% from 50.1% in the prior-year quarter.
Net operating wireline revenues were $338 million compared with $433 million a year ago. Operating loss for the segment was $96 million compared with a loss of $67 million in the year-ago period. Adjusted EBITDA was a negative of $42 million compared with a negative $11 million in the year-ago quarter. Adjusted EBITDA margin was a negative 12.4% compared with negative 2.5% in the prior-year quarter.
Operating Metrics
Total net operating expenses increased to $7,310 million from $6,994 million in the year-ago quarter. Operating income for the reported quarter was $815 million compared with $1,163 million a year ago due to higher operating expenses.
Overall adjusted EBITDA was $3,280 million compared with $2,853 million in the year-ago quarter and adjusted EBITDA margin improved to 57.1% from 47%.
Cash Flow
For first-quarter fiscal 2018, Sprint’s net cash provided by operations was 2,430 million compared with $1,924 million in the prior-year quarter.
Adjusted quarterly free cash flow was $8 million compared with $368 million in the year-ago quarter.
Liquidity
As of Jun 30, 2018, Sprint had $4,378 million of cash and cash equivalents with long-term debt, financing and capital lease obligations of $35,771 million.
Fiscal 2018 Guidance
Sprint has increased its adjusted EBITDA estimates on a reported basis to a range of $12 billion to $12.5 billion up from the previous guidance of $11.6 billion to $12.1 billion, due to impacts of the new revenue recognition standard.
Excluding the impact of the new revenue recognition standard, it expects fiscal 2018 adjusted EBITDA between $11.3 billion and $11.8 billion.
Cash capital expenditures, excluding leased devices, are projected in the range of $5 billion to $6 billion.
Zacks Rank & Stocks to Consider
Sprint currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader industry include Comtech Telecommunications Corp. (CMTL - Free Report) , Micron Technology, Inc. (MU - Free Report) and Motorola Solutions, Inc. (MSI - Free Report) . While Comtech and Micron sport a Zacks Rank #1 (Strong Buy), Motorola carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech has a long-term earnings growth expectation of 5%. It beat earnings estimates in each of the trailing four quarters, the average being 123.7%.
Micron has a long-term earnings growth expectation of 8.2%. It beat earnings estimates in each of the trailing four quarters, the average being 5.9%.
Motorola has a long-term earnings growth expectation of 8.5%. It beat earnings estimates in each of the trailing four quarters, the average being 12.1%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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