Jump to content

Sprint quarterly results


dkyeager
 Share

Recommended Posts

my initial highlights:

the drop in T-Mobile LTE speeds shown by Nielson is amazing: top to bottom ranking in one month.

 

Sprint CFO Tarek Robbiati. “Most importantly, we expect these cost reductions to be achieved without compromising network quality or impacting the customer experience.”

 

Operating loss of $197 million included $209 million of severance and exit costs and compared to an operating loss of $2.5 billion in the year-ago quarter, an improvement of approximately $2.3 billion. Adjusting for the $209 million of severance and exit costs in the current quarter and a non-cash impairment charge of approximately $2.1 billion in the prior year quarter, operating loss would have improved by approximately $400 million year-over-year.

 

Net loss of $836 million, or $0.21 per share, compared to a net loss of $2.4 billion, or $0.60 per share, in the year-ago period, an improvement of approximately $1.5 billion. Adjusting for the aforementioned severance and exit costs and impairment charge, net loss would have improved by approximately $300 million year-over-year, or $0.08 per share.

 

The company also reported the following Sprint platform results, which reflect its focus on higher value postpaid connections

 

Total net additions were 491,000 compared to 967,000 in the prior year quarter – a decline of 476,000 year-over-year.

 

Postpaid net additions of 501,000 compared to 30,000 in the prior year quarter – an improvement of 471,000 year-over-year.

 

Postpaid phone net additions were 366,000 compared to net losses of 205,000 in the prior year quarter – an improvement of 571,000 year-over-year.

 

Prepaid net losses of 491,000 compared to net additions of 410,000 in the prior year quarter – a decline of 901,000 year-over-year.

 

Based on the success of the base loyalty program that the company implemented last quarter for Boost and Virgin, it has decided to implement the program more broadly for its prepaid base. As a result, the company will report these customers as part of its prepaid base and has adjusted the 175,000 previously recorded last quarter as postpaid back into prepaid for better comparability across periods.

 

Wholesale and affiliate net additions of 481,000 compared to 527,000 in the prior year quarter – a decline of 46,000 year-over-year.

 

Together with SoftBank and its partners, the company is establishing a network-related financing entity that could provide $3 billion to $5 billion of incremental funding in fiscal 2016. This entity is expected to raise proceeds from Sprint’s existing radio access equipment, as well as a combination of new assets associated with the network densification and a small portion of its spectrum portfolio. Sprint expects the first transaction to close by the middle of calendar 2016. Together with existing facilities, these sources of liquidity are expected to fund the transformation and repayment of all maturities that come due over the next year.

 

Additionally, independent mobile analytics firm RootMetrics® awarded Sprint a company record 212 first-place (outright or shared) RootScore® Awards for overall, reliability, speed, data, call, or text network performance in the 125 metro markets measured in the second half of 2015, beating T-Mobile for the first time ever and receiving 57 percent more awards than the prior year periodi. The company also saw median downlink speeds in these metro markets more than triple on average from the first half of 2014 testing period and measured the fastest median download speeds of any carrier in 16 cities, including Austin, Dallas, Denver, Houston, Indianapolis, Kansas City, and Phoenix.

 

The company remains committed to its plan of significantly densifying the network through the deployment of small cells to further improve network performance and customer experience.

 

Financial Outlook

As a result of accelerated cost reductions, the company is raising its guidance for fiscal year 2015 Adjusted EBITDA* from its previous expectation of $6.8 billion to $7.1 billion to a range of $7.7 billion to $8 billion.

 

The company is also raising its guidance for fiscal year 2015 operating income from its previous expectation of an operating loss of $50 million to $250 million to operating income of $100 million to $300 million.

 

The company continues to expect fiscal year 2015 cash capital expenditures to be approximately $5 billion, excluding the impact of leased devices sold through indirect channels.

 

The company’s preliminary estimate for fiscal year 2016 Adjusted EBITDA* is approximately $9.5 billion to $10 billion.

 

looking at actual numbers: churn went up slightly from 1.54% to 1.62% postpaid for 1.57% for the year compared to 2.18% prior year.

 

*quarters

 

prepaid went up from 5.06% to 5.82% for 5.31% for the year compared to 4.05% for prior year.

 

interest expense has gone up slightly

 

They claim to have spent 994 million in network capex this last quarter., 3958 for the year

up slightly compared to prior year

 

no impairments

 

74 million of that capex was self-generated last quarter - typical

 

looks like 2.3 billion due by end of year (or refinance)

 
Note from Evan A:
The T-Mobile problem is because of bingeon. Neilsen measures throughput for multimedia and bingeon reduces video streams to 1.5Mbps
 
 
on footnotes, the juicy stuff..
Severance and exit costs consist of lease exit costs primarily associated with tower and cell sites, access exit costs related to payments that will continue to be made under our backhaul access contracts for which we will no longer be receiving any economic benefit, and severance costs associated with reduction in our work force.
That was 209 million this quarter, likely typical for the year, but almost all in last quarter
Nothing for litigation.   I would expect questions on this given mobile citizen.
Spin on churn:  Churn of 1.62 percent was the lowest ever for a fiscal third quarter, and compared to 2.30 percent for the year-ago period and 1.54 percent in the prior quarter. The 68 basis point year-over-year improvement, the best year-over-year improvement in 12 years, was primarily driven by improved quality of recently acquired customers and improved network experience, while the sequential increase was driven by seasonality. The last three quarters are the lowest in company history.
   Tablet net additions were 82,000 in the quarter compared to 189,000 for the year-ago period and 228,000 for the prior quarter. Both the year-over-year and sequential decline were mostly due to lower gross additions as the company continues to focus on growing phone connections. The company ended the quarter with 3.2 million tablet connections.    
   Net losses of 491,000 during the quarter compared to net additions of 410,000 in the year-ago quarter and net losses of 188,000 in the prior quarter. The year-overyear and sequential declines were mostly driven by increased competitive pressure and less promotional activity.    
 face plant.  advertising pays?
   Upgrade rate was 9.3 percent during the quarter compared to 11.5 percent for the year-ago quarter and 7.8 percent for the prior quarter. The year-over-year decrease was mostly due to a lower percentage of the base being eligible for upgrades compared to the prior year, while the sequential increase was due to seasonality.    
(expected IMO.  When people see true cost of phones, they hold them longer.
   Tri-band phones represented 64 percent of the 25.3 million ending postpaid phone connection base compared to 27 percent at the end of the year-ago quarter and 54 percent at the end of the prior quarter. During the quarter, 93 percent of postpaid phones sold were tri-band, an increase from 78 percent in the yearago period and 89 percent in the prior quarter. Two-channel (2x20 MHz) carrier aggregation capable phones, which allow for higher data speeds, were 76 percent of postpaid phones sold during the quarter, increasing the number of these phones within the phone base to 21 percent.    
 
 The company has deployed its LTE Plus Network in more than 150 major markets across the country and has plans for expansion in the coming months.   
They finally have increase this number.
   16 markets that measured the fastest median download speeds in 2H 2015: Austin, TX; Chattanooga, TN; Corpus Christi, TX; Dallas, TX; Denton, TX; Denver, CO; Houston, TX; Indianapolis, IN; Kansas City, MO; McAllen, TX; Ogden, UT; Phoenix, AZ; Spokane, WA; Toledo, OH; Wichita, KS; and Youngstown, OH .   
Wall street will likely focus on the guidance, debt and free cash flow.
   Free cash flow* was negative $797 million for the quarter compared to negative $1.8 billion in the yearago quarter and negative $100 million in the prior quarter. The current quarter free cash flow* includes $800 million related to cash received from the receivables facility, while the prior quarter includes $400 million related to cash received from the receivables facility.   
 
found more 2.5ghz money in april:  . In addition, the company had approximately $600 million of availability under vendor financing agreements that can be used toward the purchase of 2.5 GHz network equipment, with approximately $500 million of additional availability coming in April.
  • Like 12
Link to comment
Share on other sites

My rough notes for conference call, almost no exact quotes.

 

 
Claimed they are advertising for higher profit customers (not prepaid)
 
playing up network (this went on for a long time)
by far the most improved carrier
125 market speeds have tripled in last two years
78% of time on LTE
crowd sourced data will determine small cell positions
no expected disruption to customers
surgical approach to improvements
diagram shows five small cells per macro site
done with network.. almost
customer demands exceeding expectations
future growth driven by execution and accountability not from cutting price
CFO
operating revenue has stabilized for last three quarters at 8.1 billion
65% of phones are now financed.  Implies 35% on legacy plans
exceeding reduction targets for 2015
G&A has been reduced by $700m
2016 reductions: 10% cost of products, 20-30% from G&A
most will come from SG&A across sales, marketing, Care and G&A
this means lower roaming, shutdown of wimax
more self service tools for customers
reduction in back office
basically nothing will be reduced in sales
actual cash up $200m
600million in 2.5 unused so far plus 500 million in April
3-4 billion of funding will come from leasing financing sales
3-5 billion from network financing facility in 2016
 
this is well defined liquidity. see no issues in paying mature debts to end of 2016
 
capex remains same
 5 billion
q&A
 

 
network facility part of q
Sales are driving productivity
network entity.  will retain ownership of spectrum. 

 
 
 
small amount of spectrum will be put into it as collateral
will not affect our secured capacity in our revolver
network strategy Q
how to deploy densification.  are your going to shrink size of network, wimax , capacity
CEO
looking for lowest cost structure
power poles, roof tops  monopoles
network will get better progressively
backhaul cost reduction, hybrid approach.  will also use microwave and 2.5
don't want to trench fiber
this network tech person talking
looking for similar or better performance and lower cost
moving most every backhaul to ethernet
more network qs
CEO we like to keep things simple for customers.  we are going to be a price leader.  we can do this because our network is getting better.
sprint now at 20% of gross adds
up from 10% last year
john is network person
does not want to give playbook away
we are well aware our obligations to tower companies, will continue to use them for many years and they are a strategic partner.
Q; free cash flow positive date
no date, but we are monitoring the timing of expense reductions and capital deployment.  we are on an upward trajectory.
CEO growth is also burning cash
prepaid migration to postpaid migration continuing?
unclear answer.  less than 10% of handset additions.  decided not to measure some
pricing strategy?
what are you hearing from existing customers on the deals.
CEO best way to measure is churn.  existing customers finding they have the best price
large base of unlimited customers unlimited is far lower than competitors
Dr Saw q
how many tower leases will you not renew?
how much 2.5 spectrum will be used for backhaul?
 
 
All spectrum will be able to be used even if secured.
5-7 year leases. too early to speculate.
60-120mhz in most markets.
still doing field tests
 
EvanA: Basically recode article and resulting madness is bunk
 
there is a quite period before results thus it was a pig pile.
 
EvanA: Yeah I know
Hence why earnings was moved up
 
 
no shortage of Samsung or Apple products or next launches
 
Will Sprint be able to sustain progress?
CEO: can not anticipate future
 
New customer have better ARPU than legacy?
Most new customer get additional data over prior plan
average billing per customer is up 3% per year
quite happy with new and existing customers
CFO very good performance on bad debt - we are not bottom fishing.
network financing?
it will be on the balance sheet, not operating expense.  if it is a lease it will be a capital lease.
it will cover the cost of the new equipment and existing equipment and RAN
purpose is to fund the deployment of the new network that John and Gunther require.
guidance q and free cash
it seems that you should be generating significant free cash flow to pay off debt?
CFO: yes.  timing must be taken into account
 
 
Must raise the capital for network lease co to expand the network to ensure the free cash flow timing
note; this is very rough.
done
 
 
Stock up 21%
 
 
  • Like 11
Link to comment
Share on other sites

Stock jumped over 20% at one point, I think its fair to say some folks made a ton of cash manipulating Sprints news. It was all a racket, and I'm surprised that any of us got caught up with believing any of it.

 

Aside from that, Sprint's numbers are better every quarter, and they are headed in the right direction.

  • Like 4
Link to comment
Share on other sites

That's like saying "without polio, it's possible to walk."

No it's not. Because those are one time costs. Polio is forever. You're the black lining to every Sprint cloud. Don't be trollin'.

 

Using Tapatalk on Note 8.0

  • Like 10
Link to comment
Share on other sites

Fair point, these are one time costs and will be gone next quarter. I guess I should have said "without a broken ankle, it's possible to walk."

 

It is nice to see Sprint #movingforward. So far the stock market seems to like what they heard; S is up almost 9% in the first hour of trading.

Link to comment
Share on other sites

All I can do is go by what I observe. In my travels throughout the Midwest, there are very few markets anymore where Sprint service is truly bad.  Yes, there are definitely holes and sites that could be further upgraded. No doubt Sprint is getting much better.

 

In my market, where we have a small group of folks tracking wireless in the field, Sprint is now being quite surgical.  You can almost guess where improvements will go based on observed performance issues.  They are customer bandwidth focused rather than worshiping any one band.  Much of their recent work is not construction related, but rather making much better use of their existing spectrum.

  • Like 7
Link to comment
Share on other sites

I'm still realistic. Sprint has major challenges ahead. It's going to be a lot of rough waters to sail through. But they have navigated past a lot of rough waters so far. They deserve that credit.

 

They are trying some new stuff. And that causes a lot of fear. Especially when you consider the old Sprint. Time will show whether it was all for good. They just might be mad geniuses. We don't know. But we know they aren't afraid of taking risk.

 

Either way, this is going to be fun to watch. And breathes more life in the ongoing saga of S4GRU.

 

Using Tapatalk on Note 8.0

  • Like 19
Link to comment
Share on other sites

I couldn't listen to the whole call but did they mention anything about the WiMAX shutdown and possibly 3x Band 41 CA shortly after the shutdown?

 

WiMAX was in one question but I don't believe it was addressed.  I recommend looking at the transcript once released.

Link to comment
Share on other sites

WiMAX was in one question but I don't believe it was addressed. I recommend looking at the transcript once released.

It's my plan look it over. Whether it's not addressed we all know 3x Band 41 is coming soon. I just hope it comes before I upgrade to the iPhone 7 plus lol

Link to comment
Share on other sites

So, what will we see from sprint in Q1 of 2016.... i know we will see more lte plus more subscribers, but will we see a big ramp up of small cells will we see any indication of volte...will we see 3× carrier aggregation this year.... any care to comment.....

 

Sent from my SM-G928P using Tapatalk

Link to comment
Share on other sites

One interesting tidbit, they mentioned adding smallcells using crowdsourced info.

 

I wonder which systems they were referring too?

 

Neilson and root metrics are often mentioned.  They previously have used Sensorly.

  • Like 1
Link to comment
Share on other sites

So, what will we see from sprint in Q1 of 2016.... i know we will see more lte plus more subscribers, but will we see a big ramp up of small cells will we see any indication of volte...will we see 3× carrier aggregation this year.... any care to comment.....

 

Sent from my SM-G928P using Tapatalk

We will see 3x CA probably sometime this summer. Once WiMAX is completely turned off (scheduled for February 4) then Sprint can deploy another Band 41 carrier. Of course field testing would need to be done first but I expect to see it late spring/early summer.

 

I really hope we get VoLTE this year but I'm personally not pressed for it anymore. Sprint needs to densify their LTE network first before they deploy it. I expect them to do a soft launch in a few markets this year

Link to comment
Share on other sites

We will see 3x CA probably sometime this summer. Once WiMAX is completely turned off (scheduled for February 4) then Sprint can deploy another Band 41 carrier. Of course field testing would need to be done first but I expect to see it late spring/early summer.

 

I really hope we get VoLTE this year but I'm personally not pressed for it anymore. Sprint needs to densify their LTE network first before they deploy it. I expect them to do a soft launch in a few markets this year

Im excited my self... i think it's save to say we will see 3×CA this year .... i think we will see volte first in the chicago market (soft launch)... im just wondering how widespread small cells will be this year.. and will they use small cells everywhere.

 

Sent from my SM-G928P using Tapatalk

Link to comment
Share on other sites

So, what will we see from sprint in Q1 of 2016.... ...will we see 3× carrier aggregation this year.... any care to comment.....

 

 

We may know as soon as February 4.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share


×
×
  • Create New...