Sprint's Q1 Earnings Report (May 5th, 2015)

[Ascertion]

Head of Sprint Investor Relations

(800) 259-3755

investor.relations@sprint.com

 

Webcast URL: http://services.choruscall.com/links/sprint150505.html

Event

Fiscal 4Q14 Earnings Call

Date 

5/5/2015 @ 8:30AM ET

Phone

Live Toll-Free (866) 360-1063

Live Toll-Free (866) 360-1063

Live International Toll (706) 634-7849

Replay Toll-Free (800) 585-8367

Contact

Jud Henry

via http://investors.sprint.com/caldesc.aspx?IID=4057219&Key=1073746363&iframe=true&width=40%&height=40%

[Ascertion]

Will be interesting to see what they announce in regards to network expansion plans and how the numbers look for subscribers this Q.

[sbolen]

I can't wait for the inevitable irrational market reaction! Weeks of $S gains, erased, because Sprint couldn't hit guidance targets set by the Street.

 

I hate investing sometimes.

[sbolen]

This kind of lede bothers me:

 

Sprint (NYSE: S) likely lost postpaid handset customers in the first quarter but could report stronger financial results when it posts its quarterly earnings tomorrow, according to Wall Street analysts at Evercore ISI. In a research note, Evercore analysts Jonathan Schildkraut and Justin Ages also wrote that network quality continues to be a problem for Sprint that will need to be addressed.

 

Sprint's recovery and push for subscriber growth will need more time, the analysts wrote, even as the company's ongoing offer to cut the service bill in half of customers who switch from AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ) gains traction. "While we believe that the 'cut your bill in half promotion' and various leasing options are playing a positive role in attracting subs (though at the cost of decreasing ARPU), we believe S will be a postpaid phone loser for the quarter," they wrote.

 

This is most likely a case of analysts not doing enough research or letting a bias/narrative shine through. Sure, Sprint has had a lot of network quality issues in the past, but it's undeniable that they've turned a corner and have started to shoot up towards the top of the RootMetrics reports, pulling a lot closer to the other carriers. And honestly, what else could Sprint do differently to address network quality? Is a rip-and-replace of the network not good enough?

 

Maybe I'm just sensitive, being a subscriber and shareholder. Who knows.

 

Once the holes are plugged in subscriber loss, with the continued "best value in wireless" promotions, I don't see how Sprint can't completely flip the script on the Street. But, then again, once they return to profitability, the narrative will be "sure, you may of had a good quarter, but we were thinking you would have an outstanding quarter."

 

Continued:

Another big issue is Sprint's network quality and expansion, which the company is likely going to address, perhaps with a major addition of cell towers. The company has made strides in improving voice and texting quality, according to third-party testing firm RootMetrics, but still lags the other Tier 1 carriers in data speeds and performance.

 

"While S is attracting subs, we believe it will be the network quality that keeps them," the analysts wrote. "Despite S's claims on network improvements, our checks indicate S is not spending (from a tower perspective) to adequately increase network quality. We believe bigger investments are necessary, noting the issuance of an RFP (we call 'Network Vision 2') - not expected to be formalized until summer '15."

 

"Network quality plays a key role," BTIG analyst Walter Piecyk told Bloomberg. "I'm sure they have a network strategy that will get them to the point where they can start taking meaningful market share."

 

I'm glad that Piecyk was able to weigh in.

[Ascertion]

This kind of lede bothers me:

 

 

This is most likely a case of analysts not doing enough research or letting a bias/narrative shine through. Sure, Sprint has had a lot of network quality issues in the past, but it's undeniable that they've turned a corner and have started to shoot up towards the top of the RootMetrics reports, pulling a lot closer to the other carriers. And honestly, what else could Sprint do differently to address network quality? Is a rip-and-replace of the network not good enough?

 

Maybe I'm just sensitive, being a subscriber and shareholder. Who knows.

 

Once the holes are plugged in subscriber loss, with the continued "best value in wireless" promotions, I don't see how Sprint can't completely flip the script on the Street. But, then again, once they return to profitability, the narrative will be "sure, you may of had a good quarter, but we were thinking you would have an outstanding quarter."

 

Continued:

 

I'm glad that Piecyk was able to weigh in.

I completely agree - Sprint's history definitely comes to mind to most before Sprint's recent achievements do.  And Sprint's definitely at fault for that.  It's amazing that T-Mobile has done what they've done, but I wouldn't let Analysts get to you.  Most of them do not care for anything but returns.  If Analysts were in charge of running a corporation, it wouldn't last.  They'd nickle and dime everything because making a large profit isn't enough.  

 

Personally, I do not think Sprint's numbers will look good.  

These are the figures from each carrier this quarter.

T-Mobile - +1.1M PostPaid Adds (Phone subscribers)

Verizon - -168K PostPaid Adds (Phone Subscribers)

AT&T - -300K PostPaid Adds (Phone Subscribers)

Sprint - TBA

 

Just by judging these numbers, it doesn't look good for Sprint.  Of course, there are people who are adding completely new lines of service to each carrier, which can offset the predicted losses from Sprint, but I do think Sprint will announce some losses, at least for postpaid subscribers (likely masked by tablet adds.)  But, I predict the stock will go up when Sprint announces their large scale network expansion, too.  I'm pumped for tomorrow and will try to listen in on the call, although I'll be at work during the call.

[lou99/maximus1987]

It's actually 991k TMO postpaid phones. Rest are tablets.

 

 

Sent from my iPhone using Tapatalk

[gusherb]

 

 

 

And honestly, what else could Sprint do differently to address network quality? Is a rip-and-replace of the network not good enough?

 

No. They need a rip and replace of their systems and management too... What good is a good network if nobody will come to it because CS stinks? (Which is the other reason besides "the network sucks" for their reputation)

 

I consider myself blessed that I didn't have to contact them too frequently...

[WiWavelength]

No. They need a rip and replace of their systems and management too... What good is a good network if nobody will come to it because CS stinks? (Which is the other reason besides "the network sucks" for their reputation)

 

I consider myself blessed that I didn't have to contact them too frequently...

 

You seem to harp on Sprint CS a lot.  Here is a revelation:  all big four domestic wireless operators have less than stellar CS.  It comes with the territory of trying to serve roughly 50-100 million customers.

 

AJ

[lou99/maximus1987]

Analysts predict Sprint lost 2,800 monthly subscribers in its fiscal fourth quarter which ended in March, according to a Bloomberg survey of five estimates. That would leave Sprint little changed at 29.9 million postpaid users compared with 28.3 million at T-Mobile.

 

http://www.bloomberg.com/news/articles/2015-05-04/t-mobile-set-to-leapfrog-sprint-as-third-largest-u-s-carrier?cmpid=yhoo

 

 

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[IamMrFamous07]

All I care about is network details tbh. Idc if Sprint is still in 3rd place or last...as long as their network continues to improve then I'm happy!

[nmartine3]

All I care about is network details tbh. Idc if Sprint is still in 3rd place or last...as long as their network continues to improve then I'm happy!

Don't forget about US Cellular, Sprint or T-Mobile will never be last. I also agree with you, about network details as well.

[grapkoski]

Posted: http://newsroom.sprint.com/news-releases/sprint-reports-results-for-fourth-fiscal-quarter-of-2014.htm

 

• 1.2 million Sprint platform net additions compared to net losses of 383,000 in the prior year quarter
  • Postpaid net additions of 211,000 compared to net losses of 231,000 in the prior year quarter
  • Postpaid phone losses of 201,000 improved sequentially for the fourth consecutive quarter and improved by nearly 500,000 year-over-year
  • Prepaid net additions of 546,000 led the industry for second consecutive quarter and compared to net losses of 364,000 in the prior year quarter
  • Wholesale net additions of 492,000 increased from 212,000 in the prior year quarter

[WiWavelength]

Don't forget about US Cellular, Sprint or T-Mobile will never be last. I also agree with you, about network details as well.

 

USCC is not a national operator.  It is a regional operator, hence in a different category.

 

AJ

[KD8JBF]

Slides are posted...Skimming through them, I don't see anything big about a network announcement....not looking good, will have to wait for the call though.

[lou99/maximus1987]

Is there a link for a iPhone-friendly stream?

 

 

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[lou99/maximus1987]

He mentioned volte!

 

 

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[Destroyallcubes]

So if I read the report right aprint has 57 million people on its network?

[lou99/maximus1987]

So if I read the report right aprint has 57 million people on its network?

Connections. Includes m2m, wholesale, etc

 

 

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[KD8JBF]

He also mentioned the network expansion....wphew...LOL

[Ascertion]

He also mentioned the network expansion....wphew...LOL

Any details?  I'm unable to access the stream at work. 

[lou99/maximus1987]

Any details? I'm unable to access the stream at work.

It was just in Marcelo's intro. Right now it's Joe (CFO?) giving financials.

 

 

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[KD8JBF]

Any details?  I'm unable to access the stream at work. 

From what I heard, he said more details to come in the coming time as the project progresses IIRC...

[KD8JBF]

But he did say that adding macro and pico sites all across to expand and densify the network.

[lou99/maximus1987]

CAPEX is $5bil (excluding phone leases) for fiscal 2015.

Seems low given how many sites don't have 2.5

 

TMO is ~$4.7bil.

 

 

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[KD8JBF]

Saying that they are in the final stages of the network densification plan called the "Next Generation Plan"