Sprint's 4th Quarter Earnings

[legion125]

Interesting facts. More in depth comments may come later as more delve into it. Sprint sold 1.8 million iPhones; 40% from new customers. Sprint added 161,000 subscribers while analysts predicted 272,000. What direction do you think Sprint is going?

 

http://www.reuters.com/article/2012/02/08/us-sprint-idUSTRE8170UH20120208

 

 

Sprint loss widens on iPhone costs

 

(Reuters) - Sprint Nextel (S.N) posted a bigger loss, reflecting the higher costs of selling Apple Inc's (AAPL.O) iPhone. But the loss was smaller than expected because its signed up fewer subscribers than expected.

Since Sprint subsidizes the cost of some of its phone sales, its costs rise and profit dwindles the more customers it wins. But since subscriptions fell short of expectations, its loss was smaller than expected.

Sprint's loss was 35 cents per share excluding unusual items compared with Wall Street expectations for a loss of 37 cents per share, according to Thomson Reuters I/B/E/S.

Its profit margin based on operating earnings before interest, depreciation and amortization (OIBDA) fell to 9.5 percent from 16 percent a year earlier but beat expectations for 8.6 percent, according to eight analyst estimates Reuters compiled.

"It's still unbelievably depressed and subscribers were below expectations," said Roe Equity Research analyst Kevin Roe who also noted that Sprint's targets for the full year were not particularly impressive.

The margin decline was hurt by the hefty cost of selling the iPhone.

Sprint's rivals Verizon Wireless and AT&T Inc (T.N) also struggled in the fourth quarter with rising costs.

Sprint added 161,000 total net subscribers in the quarter compared with the average expectation for 272,000 additions from eight analyst estimates compiled by Reuters.

But it sold 1.8 million iPhones in the quarter, 40 percent of which to new customers.

Sprint's loss widened to $1.3 billion, or 43 cents per share, from $929 million, or 31 cents per share, a year earlier.

Revenue rose to $8.72 billion from $8.3 billion and was slightly ahead of Wall Street expectations for $8.69 billion, according to Thomson Reuters I/B/E/S.

Sprint forecast full-year net service revenue growth of 4 percent to 6 percent and forecast 2012 adjusted OIBDA between $3.7 billion and $3.9 billion.

[MacinJosh]

Sprint is definitely giving effort in hopes of making it in the long term. And that was quite a few iPhones sold for their first quarter. Very impressive. I think they will be heading for growth and greater profitabiity by the end of this year with NV & LTE. Go Sprint!

[legion125]

Funny, Sprint just made a passing comment about Clearwire with no details about its TD-LTE testing or planned deployment, and no mention of LightSquared at all.

[S4GRU]

Sprint is afraid to discuss Clearwire in association with investors. Definitely spooked!

 

iPhone numbers beat my expectations. I was expecting 1M to 1.2M. 1.8M was a much bigger number than I thought possible.

[legion125]

The more I look at the numbers, the more I see how deep of a hole Sprint has dug with the iPhone and NV. Although its still a mixed bag of good and bad, I'm begining to wonder how long it will take or if Sprint can dig themselves out of this?

[S4GRU]

The more I look at the numbers, the more I see how deep of a hole Sprint has dug with the iPhone and NV. Although its still a mixed bag of good and bad, I'm begining to wonder how long it will take or if Sprint can dig themselves out of this?

 

It's going to be a very long and bumpy ride. I expect next two quarters to not be better. iPhone sales are going to slow down, if they haven't already. WiMax device sales are plummeting. It's not going to be until a really hot LTE device hits the market and the LTE iPhone before the financials really start to take a serious turn for the better.

 

People will not subscribe to Sprint because of Network Vision. I doubt there are many consumers who say, "I'm going to become a Sprint customer when Network Vision shows up in Dubuque." It's not really a marketable thing. You aren't going to see it on billboards. Network Vision is more about operating costs and reducing churn. People expect their wireless network to perform. It's not a selling point. It's supposed to work. And NV is just going to do that. Make a functioning network, that is easier and cheaper for Sprint to run and maintain.

 

So it is going to be a long time until Sprint starts making money. But even though they won't be making money soon, these things were necessary for the long run. No iPhone + No Network Vision = Sprint Bankruptcy.