Earnings Preview: Sprint – Analyst Blog

Filed in earnings, lead, silver, ubs by on April 26, 2010 0 Comments

Sprint Nextel ( S ) is slated to report first-quarter 2010 results on Wednesday, April 28, 2010, ahead of the opening bell. The third-largest U.S. wireless carrier has not released any financial forecasts for the quarter. The current first quarter Zacks Consensus Estimate is a loss per share of 17 cents. In its fourth-quarter conference call, Sprint stated that it expects improvement in both postpaid and total subscriber losses in 2010 compared to the last year. Moreover, the carrier expects to continue generating positive free cash flow in 2010, driven by the ongoing cost-cutting measures. Sprint generated $2.8 million in free cash flow in 2009, the highest ever in the company’s history. Fourth Quarter Flashback Sprint reported fourth-quarter 2009 results with a net loss per share of 34 cents, worse than the Zacks Consensus Estimate of a loss of 18 cents. The carrier posted a net loss of $980 million, 40% lower than the net loss of $1,621 million (57 cents per share) reported a year ago. Consolidated revenue fell 7% year-over-year to $7.9 billion, below the Zacks Consensus Estimate of $8 billion, due to lower contributions from its wireline and postpaid wireless businesses. Revenues from the wireless segment dipped 5% year-over-year, attributable to sustained declines in the postpaid segment. However, declines in both total and retail postpaid customer bases were lower compared to the previous quarter. Losses in postpaid were partly offset by the sustained gains in the carrier’s Boost Mobile prepaid subscriber base. On the wireline side, revenues declined 13% year-over-year due to erosion in voice and data revenue. Estimate Revisions Trend Agreement Estimates for the first-quarter have been mixed over the past week and month. Out of a total of 25 analysts covering the stock, 1 analyst has lifted his/her earnings estimate over the last 7 days while 2 have moved in the opposite direction. Likewise, 4 analysts have raised their estimates while 5 made negative revisions over the last 30 days. For 2010, estimates have been inclined more towards the negative side over the last month with 6 analysts (out of a total of 28) have truncated their estimates while 2 have made positive revisions. Moreover, 2 analysts have cut their forecasts over the past week while 1 has increased his/her estimates. The Zacks Consensus Estimate of loss per share for 2010 is 65 cents, representing a roughly 11.6% improvement from 2009 loss per share of 74 cents. The near-term visibility for improvements in contract customer losses represents the key impetus for upward estimate revisions. Moreover, continued expansion of the 4G network footprint coupled with the forthcoming launch of 4G handset should provide a leeway to stabilize wireless revenues this year. Conversely, negative estimate revisions can be attributed to the sustained decline in the overall wireless subscriber base and the risk of lower customer additions in the Boost Mobile prepaid unit as competition intensifies in 2010 due to the aggressive roll-out of competitive price plans by the rivals. Magnitude The magnitude of revisions for the forthcoming quarter has plateaued over the last 30 and 60 days. However, there has been a decrease by a penny over the past week. Estimates for 2010 have gone down by 1 cent over the past week and month. With respect to earnings surprises, Sprint had three negative surprises and one positive surprise in the preceding four quarters. The struggling top-tier carrier produced…

More here:
Earnings Preview: Sprint – Analyst Blog

Tags: , , , , , , , ,

About the Author ()

Leave a Reply

Your email address will not be published. Required fields are marked *