Sprint Nextel (NYSE: S): Q1 Earnings Preview 2011

Sprint Nextel (NYSE: S), the third-largest US wireless carrier, is scheduled to release its first quarter earnings before the opening bell on Thursday, April 28, 2011. Analysts, on average, expect the company to post a loss of 22 cents a share on revenue of $8.19 billion. In the year ago quarter, the company posted a loss of 29 cents per share on revenue of $8.08 billion.

Sprint Nextel Corporation offers wireless and wireline communications products and services to consumers, businesses, and government users in the United States, Puerto Rico, and the U.S. Virgin Islands.

In the preceding fourth-quarter, the  the Overland Park, Kansas-based company company's net loss was $929 million, or 31 cents per share, compared to a loss of $980 million, or 34 cents per share, in the year-ago period. Net operating revenues for the quarter grew 6 percent to $8.30 billion from $7.87 billion in the prior-year quarter. Analysts, on average, expected the company to post a loss of 30 cents a share on revenue of $8.17 billion. Sprint added nearly 1.1 million total wireless subscribers in the fourth quarter, driven by net postpaid subscriber additions of 58,000 and the company's best ever fourth quarter prepaid net subscriber additions of 646,000.

A its last earnings call in February, Sprint Nextel said that it expects postpaid subscriber net additions for fiscal 2011 and to improve total wireless subscriber net additions in 2011, as compared to 2010. Sprint said 2011 capital spending would be about $3 billion, up from its previous target for $2.5 billion due to a network modernization project it is kicking off this year.

expect Sprint to revert to a subscriber loss this quarter, particularly with Verizon (NYSE: VZ) now selling the iPhone.

The company is rapidly expanding its 4G footprint and has continued to introduce newer devices  that can take advantage of this faster network and promote a better data usage experience for customers. HTC EVO 4G and Samsung Epic 4G have been two such successes for the carrier. So far, the company has unveiled 20 4G devices, including the BlackBerry PlayBook tablet computer from Research In Motion Ltd. (NASDAQ: RIMM). In comparison, Verizon’s LTE 4G network began limited service at the end of 2010, while AT&T’s is still only in the testing phase. 

Sprint plans to emphasize its low-cost plans for unlimited wireless data use, a pitch that will grow more compelling as more people use mobile phones and tablets to surf the Web and watch video. The company offers unlimited data service for $69.99 a month, while AT&T eliminated its unlimited plan and Verizon charges more. Sprint is well positioned to leverage the growing wireless smartphone market in the U.S. with its rich portfolio of popular smartphone offerings and more advanced devices in the pipeline. 

Early this year, the wireless carrier recently said that it would spend up to $5 billion over the next three years to upgrade its network. Sprint said it had reached deals with Alcatel-Lucent SA , Ericsson AB and Samsung Electronics Co. for the project. Sprint also said it would start phasing out the Nextel portion of its network beginning in 2013.

The plans to start a service this year that will allow customers to make purchases with their mobile phones, ahead of a similar initiative from rivals Verizon Wireless, AT&T Inc. and T-Mobile USA. Sprint is working with payment networks and handset makers on technology called near-field communication, or NFC, which allows people with smartphones to make purchases by tapping them on or waving them in front of electronic readers in stores, said Kevin McGinnis, vice president of product platforms. The effort may give Sprint an advantage in attracting new customers and compelling existing ones to upgrade to the tap- and-go handsets. The competing joint venture, known as Isis, said in November its network may not be available to consumers until 2012.

Last month, Sprint shares fell sharply in the wake of an announcement that AT&T Inc. (NYSE: T) will acquire Deutsche Telekom’s unit. The merger would result in a wireless industry, dominated by two strong companies that control almost 80% of the U.S. wireless post-paid market.

In terms of stock performance, Sprint shares have gained nearly 13 percent over the past year.

Full Disclosure: None.

Sprint Rallies In Pre-Market Trading

Shares of Sprint Nextel Corp. (NYSE: S) rallied more than 5% in pre-market trading after Bloomberg reported that the third-largest US mobile-phone carrier has held talks with Deutsche Telekom AG to buy its  T-Mobile USA unit. The companies haven’t been able to agree on the valuation of T-Mobile USA, Bloomberg said, citing people with knowledge of the matter. Talks have included discussion of Deutsche Telekom owning about 50 percent of a combined T-Mobile USA-Sprint. Stay tuned for more.

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Sprint Nextel (NYSE: S): Q4 Earnings Preview 2010

Sprint Nextel (NYSE: S), the third-largest US wireless carrier, is scheduled to release its fourth quarter earnings before the market open on Thursday, February 10, 2011. Analysts, on average, expect the company to post a loss of 30 cents a share on revenue of $8.17 billion. In the year ago quarter, the company posted a loss of 34 cents per share on revenue of $7.87 billion.

Sprint Nextel Corporation offers wireless and wireline communications products and services to consumers, businesses, and government users in the United States, Puerto Rico, and the U.S. Virgin Islands.

The company has been steadily losing money and customers amid stiff competition. In the preceding third-quarter, the  the Overland Park, Kansas-based company company's net loss was  911 million, or 30 cents a share, compared to $478 million, or 17 cents, in the year-ago quarter. Revenue increased 1.4% to $8.15 billion from $8.04 billion. Analysts, on average, expected the company to post a loss of 28 cents per share on revenue of $8.03 billion. During the third quarter, Sprint gained approximately 644,000 subscribers, representing 364,000 retail subscribers and 280,000 wholesale and affiliate subscribers. This was reportedly the best wireless subscriber growth since 2006.

A its last earnings call in November, the company said that it expects postpaid, prepaid and total net subscriber results to improve in the fourth quarter. The last time Sprint posted a year of postpaid net customer growth was 2006. It had one growth quarter in 2007.

The company is rapidly expanding its 4G footprint and has continued to introduce newer devices  that can take advantage of this faster network and promote a better data usage experience for customers. HTC EVO 4G and Samsung Epic 4G have been two such successes for the carrier. So far, the company has unveiled 18 4G devices, including the BlackBerry PlayBook tablet computer from Research In Motion Ltd. (NASDAQ: RIMM). The company's 4G network has since expanded to 71 markets, and with reliable service, it’s appealing for business clients. In comparison, Verizon’s LTE 4G network began limited service at the end of 2010, while AT&T’s is still only in the testing phase.  Sprint recently announced a 2011 target for launch of tablets capable of connecting to its 4G high-speed wireless network. The move could produce upside to Sprint’s recorded revenue per subscriber, as new subscribers join Sprint’s network and existing subscribers add premium high-speed data plans to their service.

Sprint plans to emphasize its low-cost plans for unlimited wireless data use, a pitch that will grow more compelling as more people use mobile phones and tablets to surf the Web and watch video. The company offers unlimited data service for $69.99 a month, while AT&T eliminated its unlimited plan and Verizon charges more. Sprint is well positioned to leverage the growing wireless smartphone market in the U.S. with its rich portfolio of popular smartphone offerings and more advanced devices in the pipeline. 

The wireless carrier recently said that it would spend up to $5 billion over the next three years to upgrade its network. Sprint said it had reached deals with Alcatel-Lucent SA , Ericsson AB and Samsung Electronics Co. for the project. Sprint also said it would start phasing out the Nextel portion of its network beginning in 2013.

Among other developments, the company raised the price of its 3G Everything data plans by $10. The so-called “premium data” charge will bring Sprint’s 3G data plans into the exact same price range as their current 4G pricing plans.

Full Disclosure: None.

Sprint Nextel Corp (NYSE: S): Third Quarter Earnings Preview 2010

Sprint Nextel (NYSE: S), the third-largest US wireless carrier, is scheduled to release its third quarter earnings before the market open on Wednesday, October 27, 2010. Analysts, on average, expect the company to report a net loss of 28 cents a share on revenue of $8.03 billion. In the year ago quarter, the company reported a net loss of 17 cents per share on revenue of $8.04 billion.

The company has been steadily losing money and customers amid stiff competition. In the preceding second-quarter, the company's net loss was $760 million, or 25 cents a share, compared to a loss of $384 million, or 13 cents a share, in the same quarter last year. On an adjusted basis, the company posted a second-quarter loss of 15 cents per share in the second quarter. Revenue dropped 1.4% to $8.03 billion.  Analysts, on average, expected the company to report a loss of 20 cents per share on revenue of $8.03 billion. Total wireless subscribers by 111,000 in the quarter, driven by Sprint’s best postpaid churn performance ever.S print Nextel served more than 48.1 million customers at the end of the second quarter.

At its last earnings call in July, the company said that it expects to have positive total net wireless subscriber additions during the second half of 2010 and and fewer net postpaid subscriber losses as compared to the first half. The company expects to see sequential improvement in prepaid net adds in the third quarter.

The company is rapidly expanding its 4G footprint and has continued to introduce newer devices. The company has also been able to attract new customers, thanks to cheaper monthly fees for wireless data services like texting and mobile web. Sprint 4G is now available in 55 cities across the country. Since introducing 4G service in 2008, Sprint has launched 15 4G devices, with 11 devices currently available, including phones, USB modems, mobile hotspots and routers. Last quarter Sprint unveiled HTC Evo, the first mobile phone designed to operate on a 4G network. Late in August, Sprintbegan  selling Samsung Epic 4G, the only 4G smartphone to offer  full slide-out QWERTY keyboard. In September, Sprint announced the upcoming arrival of Samsung Galaxy Tab to its 3G network this fall. In October, Sprint unveiled Dell Inspiron Mini 10, the first dual-mode 3G/4G-embedded netbook and notebook offered in the country by a national wireless carrier.

In terms of stock performance, Sprint shares are up almost 30% since the beginning of the year.

Full Disclosure: None.

Sprint-Nextel Corp. (NYSE: S): Better Days Ahead?

The turnaround potential of Sprint Nextel Corp. (NYSE: S), the third-largest US wireless carrier, is vastly underestimated by investors and Wall Street analysts.

Recently, Chief Financial Officer Bob Brust told investors the telecommunications company plans to pay down its debt and continue to strengthen its balance sheet. "(In) the next 30 months, we have about $5.2 billion of debt coming due. Right now we plan to pay that as due, not refinance," said Brust at the Raymond James Institutional Investors Conference, according to a transcript.

He also told investors that after 10 percent declines in Sprint's revenue for each of the past two years, "this year we hope it is more stable or flattish."

Brust said that its postpaid, or contract, customer losses are "narrowing quite a bit," while prepaid "has gotten much stronger." This, he added, should help stabilize revenue, and "maybe in the next several quarters, we will actually see some growth in revenue which would be the end of the turnaround." Brust also said Sprint is trying to achieve the "leanest possible cost structure," but at the same time it must also reinvigorate revenue growth. "Because if we just cost reduce and don't turn around the revenue, it will never end. I mean we will just end up with nothing," he said. "So we have to get this revenue going."

The company is working hard to reduce its costs and improve customer retention. In December, the wireless service provider said it would slash up to 2500 jobs by the end of the year, as part of plans to cut annual costs by at least $350 million.

Total subscriber loss in fourth quarter of last year was 148,000, compared to 1.27 million last year and 545,000 in the previous quarter. In retail post-paid subscribers, net losses were 504,000, compared to 1.11 million last year, and 801,000 in the third quarter. Churn rate in retail post-paid segment reduced to 2.11% from 2.16%, from fourth the quarter of 2008. In retail pre-paidb segment, churn declined to 5.56% from last year's 8.20%.

Despite weaknesses in other segments, the company's pre-paid brand, Boost Mobile has continued to attract subscribers. It offers unlimited voice and text for $50 per month and is targeted at lower income, and younger customers. In retail pre-paid subscribers ARPU rose to $31 from $30, due to national Boost Monthly Unlimited offering.

Sprint's prepaid segment is also expected to get a boost by its acquisition of Virgin Mobile. Industry experts contend that the purchase could help Sprint reverse the losses in subscriber count and lead to net growth in 2010.

Looking ahead, Sprint Nextel expects that both post-paid and total subscriber losses will improve in 2010, as compared to 2009. In addition, the company expects to continue to generate positive Free Cash Flow during 2010.

In fiscal year 2009, the company generated considerable free cash flow of $2.8 billion compared with $1.8 billion in 2008. The company said it would pay down $5.2 billion in debt coming due through 2012 with cash and free cash flow. Right now, Sprint has about $3.9 billion in cash and marketable securities, which suggests that the company is confident that it can produce at least another $1.3 billion in cash before then.

Sprint Nextel is also focusing on nationwide expansion for its fourth-generation (4G) wireless broadband service. The company made history by becoming the first US carrier to launch 4G WiMax mobile broadband services in the U.S. with the official commercial service launch in Baltimore in early October 2008. As a majority owner of Clearwire, Sprint is poised to cash in on the business, if it is successful. Last month, Sprint Nextel announced that it would begin offering a 4G smartphone in the next several months.

The company's customer service is improving and this will have a direct positive benefit on future earnings. Customer satisfaction has improved for seven sequential quarters and fewer customer issues has allowed Sprint to shutter 27 call centers in the past two years. Thus, in light of above factors, it appears that Sprint stock have little downside and significant appreciation potential.

Full Disclosure: None.

Sprint Nextel Corp. (NYSE: S): Q4 Earnings Preview 2009

Sprint Nextel Corp. (NYSE: S), the third-largest US wireless carrier, is scheduled to release fiscal fourth-quarter 2009 earnings before the market open on Wednesday, February 10, 2010. Analysts, on average, expect the company to report a loss of 19 cents a share on revenue of $8.02 billion. In the year ago quarter, the company reported a loss of 11 cents per share on revenue of $8.43 billion.

Sprint Nextel Corporation offers wireless and wireline communications products and services to consumers, businesses, and government users in the United States and internationally. Its Wireless segment provides wireless mobile voice and data transmission services on networks that utilize CDMA and iDEN technologies.

The company has been losing money and subscriber at a rapid pace amid stiff competition. In October, the Overland Park, Kansas-based company posted third quarter loss and missed Wall Street expectations. Net loss totaled $478 million or $0.17 per share, wider than net loss of $326 million, or $0.11 per share, in the same quarter last year. Net operating revenues for the quarter declined 9% to $8.04 billion from $8.82 billion. Analysts, on average, expected the company to report loss of $0.15 per share on revenue of $8.09 billion.

The company's wireless net operating revenues in the third quarter fell 8% to $6.93 billion from $7.54 billion last year, due to fewer post-paid subscribers, partially offset by more prepaid subscribers. In the Wireless segment, the company served 48.3 million customers at the end of the third quarter of 2009, and net retail subscribers declined by a total of 135,000 and net wireless customers declined by approximately 545,000. Meanwhile, the company gained a net 801,000 prepaid iDEN customers, offset by net losses of 135,000 prepaid CDMA customers. Post-paid churn in the quarter was 2.17%, compared to 2.15% in the year-ago period, while prepaid churn dropped to 6.65% from last year's 8.16%. Wireline net operating revenues declined 10% to $1.41 billion from $1.58 billion last year, as voice and data declines more than offset 5% growth in Internet revenues. Voice revenues for the quarter declined 14% from last year.

The company generated $664.0 million in the third quarter, after a $200.0 million pension contribution. The company continues to expect to generate positive free cash in the fourth quarter. Sprint also expects both post-paid and total subscriber full-year losses should improve in 2009 from last year, and expects fiscal 2009 capital expenditures to be less than $1.7 billion.

At the end of the third quarter 2009, Sprint had $5.9 billion in cash, cash equivalents and short-term investments and $1.6 billion in borrowing capacity available under its revolving bank credit facility, for total liquidity of $7.5 billion.

Sprint has been in the midst of a turnaround plan to reduce its costs and improve customer retention. In December, the wireless service provider said it would slash up to 2500 jobs by the end of the year, as part of plans to cut annual costs by at least $350 million. The company also expects to incur charges of around $60 million to $80 million in the current quarter related to severance and other related costs. It also paid down $1.0 billion of the outstanding loan amount under its $4.5 billion revolving credit facility. With this action Sprint Nextel no longer has an outstanding balance.

Sprint Nextel Corp., in December, also announced the completion of its acquisition of iPCS, Inc. for about $831 million. In November, it completed the acqusition of Virgin Mobile USA, strengthening its position in the growing prepaid segment, bringing together the iconic Virgin Mobile brand with Spint's successful Boost Mobile business.

Despite weaknesses in other segments, the company's pre-paid brand, Boost Mobile has continued to attract subscribers. It offers unlimited voice and text for $50 per month and is targeted at lower income, and younger customers. During the first three quarters of 2009, Boost has generated over 2.1 million net adds, which is more prepaid net adds than any carrier reported on a full-year basis in 2008. Sprint Nextel is also working hard on nationwide expansion for its ourth-generation (4G) wireless broadband service. The company made history by becoming the first US carrier to launch 4G WiMax mobile broadband services in the U.S. with the official commercial service launch in Baltimore in early October 2008.

The company's stock currently trades at a forward P/E (fye 31-Dec-10) of 13.14 and PEG Ratio (5 yr expected) of 1.64. In terms of stock performance, Sprint shares have gained 39 percent over the past year.

Full Disclosure: None.

Sprint Nextel Corp. (NYSE: S): Third Quarter Earnings Preview 2009

Sprint Nextel (NYSE: S), the third-largest US wireless carrier, will release its third quarter earnings before the market open on Thursday, October 29, 2009. Analysts, on average, currently expect the company to report a net loss of 15 cents a share on revenue of $8.09 billion. In the year ago quarter, the company reported a net loss of 11 cents per share on revenue of $8.81 billion. In the past four quarters, the company has twice missed Wall Street forecasts.

The company has been steadily losing money and customers amid stiff competition. Late in July, the company reported that its second quarter net loss widened to $384 million or 13 cents per share, from $344 million, or 12 cents per share, in the year-ago quarter. Net operating revenues for the quarter were $8.14 billion, down 10% from $9.06 billion in the same period last year and down 1% from the preceding first quarter.Analysts, on average, expected the company to report a loss of 2 cents a share on revenue of $8.12 billion for the quarter.

On a segmental basis, Sprint Nextel's wireless net operating revenues for the quarter declined 9% to $7.00 billion from $7.74 billion in the previous-year quarter. Of the total net operating revenues, wireless service revenues for the quarter declined 9% year-over-year to $6.4 billion. Operating loss for the segment widened to $314 million from $262 million in the same period last year. Wireless post-paid average monthly revenue per user, or ARPU, remained stable at $56, primarily due to growth in fixed-rate bundled plans such as Simply Everything, offset by declines in usage and roaming. Prepaid ARPU for the quarter was approximately $34, compared with $30 in the year-ago period. Post-paid churn in the quarter was 2.05%, up from 1.98% in the year-ago period, but down from 2.25% in the preceding first quarter. Postpaid churn is the measure of these monthly customers dropping service. The company has one of the industries worst churn rates.

The Overland Park, Kansas-based company is losing subscribers at a rapid pace. Even the launch of the highly anticipated Palm Inc. Pre couldn't prevent Sprint Nextel Corp.'s most lucrative customers from defecting to rivals in the second quarter. The wireless operator started selling the much-awaited Palm Pre on June 6 and has exclusive rights to the 'Pre' through at least the end of the year. Sprint Nextel served 48.8 million customers at the end of the second quarter, down 0.61% from 49.1 million at the end of the preceding first quarter. For the latest quarter, total wireless customers declined by approximately 257,000, including net losses of 991,000 post-paid customers - comprising 393,000 CDMA and 598,000 iDEN customers. The company gained a net 938,000 prepaid iDEN customers, offset by net losses of 161,000 prepaid CDMA customers. The company also experienced a net loss of 43,000 wholesale and affiliate subscribers.

The company's wireline revenues for the quarter were $1.43 billion, down 11% from $1.61 billion in the previous-year quarter, as legacy voice and data declines offset Internet revenue growth. On a sequential basis, wireline revenues declined 3% from the first quarter. Operating income for the segment increased to $208 million from $143 million a year ago. Internet revenues were up 10%, reflecting strong enterprise demand for Global MPLS services and the increasing base of cable subscribers who utilize VoIP services. Legacy voice revenues declined 18% year-over-year. Legacy data revenues dropped 32% from a year ago, in part due to customer transitions to IP services.

Recently, Amazon (NASDAQ: AMZN) dropped Sprint as the primary wireless service provider for the latest versions of the Kindle 2 e-book reader. From now on, new Kindle 2s, in the U.S. and worldwide, will be powered exclusively by AT&T’s 3G network. The move is being seen as a major blow to Sprint, as Kindle DX, is $230 more expensive than the international Kindle and, thus, is likely to enjoy lower sales.

However, there are few bright spots. The recessionary environment has actually spurred demand for Boost Mobile, its pre-paid brand which offers unlimited voice and text for $50 per month and is targeted at lower income, and younger customers. The segment added 770,000 subscribers in the second quarter, which represents the highest reported level of prepaid performance by any U.S. carrier in three years. Sprint Nextel is also working hard on nationwide expansion for its fourth-generation (4G) wireless broadband service. The company made history by becoming the first US carrier to launch 4G WiMax mobile broadband services in the U.S. with the official commercial service launch in Baltimore in early October 2008.

Early this month, Sprint unveiled Samsung's First Android-Powered Phone "Samsung Moment." The new mobile will be available beginning November 1. Earlier, Sprint and Taiwan-based mobile phone company HTC Corporation announced the proposed launch of the HTC Hero, the wireless device running on Android software in October.

Last month, shares of the company surged after a London-based newspaper reported that German telecom giant Deutsche Telekom AG is likely to submit a bid for Sprint Nextel Corp.. However, Deutsche Telekom CFO Timotheus Hoettges later suggested that his firm is not interested in acquiring the U.S.-based wireless giant.

Sprint recently announced that it has agreed to acquire its regional affiliate and wireless communications service provider iPCS, Inc. for $24 per share in cash, or about $831 million, including the assumption of $405 million of net debt. The acquisition is expected to be completed by the year end or early 2010. Sprint expects to achieve annual synergies of about $30 million through the proposed transaction and expects the transaction to be free cash flow accretive in 2010.

Meanwhile, federal antitrust authorities approved Sprint's $483 million purchase of prepaid phone services giant, Virgin USA, on Aug. 24. The companies announced the deal July 28. Virgin Mobile USA Inc. shareholders will vote Nov. 24 on the proposed deal.

In terms of stock performance, Sprint shares are up almost 67% since the beginning of the year. Shares of the company lost 13 cents or 3.85% to close at $3.25.

Disclosure: Author doesn’t own any of the stocks discussed here.