Back to top

Sprint (S) Beats on Q1 Earnings Estimates, Revenues Miss

Read MoreHide Full Article

Sprint Corp. (S - Free Report) is an U.S. national wireless carrier. Headquartered in Kansas, Sprint is a telecommunication company that provides wireless services and is also an internet service provider. The company operates in two segments: Wireless and Wireline.

Sprint is on track with its network modernization and integration efforts, which has fortified its position in the wireless industry. We believe these efforts have helped the company witness substantial wireless customer addition in the last reported fourth quarter of fiscal 2016, in which the company added 59.702 million (up 1.5% year over year) wireless connections. We also believe that efficient usage of capital, reduction of cell sites, elimination of dual networks, backhaul efficiencies, reduced churn, lower roaming charges and energy cost savings will act as major positives to fourth-quarter results.

We are also impressed with Sprint’s efforts to lure customers from rival carriers such as AT&T and Verizon Communications by offering attractive promotional plans and lucrative discounts. However, this has led to high cash burn and heavy losses for the company. Additionally, the company has a debt-laden balance sheet and negative operating cash flow. Moreover, it has been witnessing losses since 2007. Notably, such high debt levels, decreasing cash flows and liquidity pressure may adversely affect the company’s cost of capital while trying to raise new funds for network expansion.

Zacks Rank: Sprint currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings:  Sprint incurs impressive net income in Q1 of fiscal 2017 (ended Jun 30, 2017). Moreover, net income was above the Zacks Consensus Estimate. Our consensus estimate called for a net loss of 1 cent per share but the company reported net income of 5 cents per share. The bottom line grew 183.33% on a year-over-year basis. Investors should note that these figures take out stock option expenses.

Revenue:   Sprint reported total revenue of $8,157 million, up 1.81% year over year but fell below the Zacks Consensus Estimate of $8,191 million.

Key States to Note:   In the reported quarter, Sprint witnessed net additions of 61,000 wireless customers, including postpaid net losses of 39,000 but prepaid net additions were 35,000 (compared to net losses of 306,000 in the prior yearquarter) and wholesale and affiliate net additions of 65,000.  Sprint had postpaid phone net additions of 88,000, its eighth consecutive quarter of net additions. Quarterly total retail postpaid churn rate was 1.65% versus 1.56% in the year-ago quarter. Total retail prepaid churn rate was 4.57 versus 5.39% in the year-ago quarter. Postpaid phone churn was 1.50% versus 1.39% in the year-ago quarter.

Sprint Corporation Price and EPS Surprise


Sprint Corporation Price and EPS Surprise | Sprint Corporation Quote

Check back later for our full write up on this Sprint earnings report later!

Will You Make a Fortune on the Shift to Electric Cars?           

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think. See This Ticker Free >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Sprint Corporation (S) - free report >>

More from Zacks Tale of the Tape

You May Like