Leading U.S. wireless carrier
Sprint Nextel Corp.
) reported fourth quarter and full year 2012 results, before the
The company witnessed adjusted loss per share of 30 cents in the
fourth quarter, narrower than the Zacks Consensus Estimate of a
loss of 46 cents. The results compared favorably with the
adjusted loss per share of 35 cents recorded in the fourth
quarter of 2011. Sprint performed better than our expectation on
strong revenue growth and continued focus on the core Sprint
Quarterly revenues grew 3.2% year over year to $9,005 million,
surpassing the Zacks Consensus Estimate of $8,918 million. The
growth is attributed to higher wireless service revenues along
with strong sales of smartphones.
For full-year 2012, Sprint posted loss of $1.44 per share, on
revenues of $35.3 billion.
Adjusted OIBDA (operating income/loss before depreciation,
amortization, asset impairments and abandonments) improved 2.1%
year over year to $860 million in the reported quarter, resulting
in OIBDA margin of 10.7%.
operating revenue increased 4.5% year over year to $8,275 million
in the quarter.
Sprint lost approximately 337,000 subscribers in the reported
quarter, representing a net loss of 94,000 in retail subscribers
and 243,000 in wholesale and affiliate subscribers.
The Sprint platform added 401,000 post-paid customers while the
Nextel platform lost 644,000. With regard to prepaid
subscription, Sprint added 525,000 users while the Nextel
platform lost 376,000 prepaid customers.
At the end of the fourth quarter, Sprint had approximately 56
million customers (including 32 million post-paid, 16 million
prepaid and 8 million wholesale and affiliate) compared with 55
million in the year-ago quarter.
Wireless post-paid average revenue per unit (ARPU) increased to
$61.47 from $58.59 in the year-ago quarter, boosted by higher
monthly recurring revenue. Prepaid ARPU remained at same level of
Sprint platform post-paid churn (customer switch) rate was 1.98%
in the reported quarter, compared with 1.99% in the year-ago
quarter. Sprint platform prepaid churn improved to 3.02% from
3.07% in the prior-year quarter. The year-over-year improvement
was primarily aided by continued enhancement of product and
During 2012, Sprint sold nearly 6.6 million
) iPhones and about 40% of the iPhone customers were new to
revenues dropped 10% year over year to $949 million owing to poor
performances in the voice, Internet and cable units.
At the end of 2012, Sprint had approximately $6,351 million in
cash and cash equivalents compared with $5,447 million, last
year. Net debt increased to $16.1 billion from $14.7 billion at
the end of 2011. The company incurred a capital expenditure of
$4,261 million in 2012.
For full-year 2013, Sprint expects adjusted OIBDA in the range of
$5.2 billion to $5.5 billion.
Other Telecom Stocks
The largest U.S. mobile service provider
Verizon Communications Inc.
) reported fourth quarter 2012 results on Jan 22. The company
posted adjusted earnings of 45 cents per share, below the Zacks
Consensus Estimate of 54 cents and also lagged the year-ago
figure of 52 cents.
Ace communications firm
) reported fourth-quarter 2012 financial results on Jan 24. The
company's adjusted earnings per share of 44 cents missed the
Zacks Consensus Estimate of 47 cents. Comparing year over year,
the results improved 10% from adjusted earnings of 40 cents.
Sprint currently holds a Zacks Rank #3, implying a Hold rating.
We believe that Sprint is focusing on narrowing its losses in the
coming quarters on the back of strong wireless business with
reducing churn, improving ARPU and increasing penetration of
In addition, the company continues to benefit from the Network
Vision plan and the sale of iPhones that are expected to register
new highs in its wireless business.
APPLE INC (AAPL): Free Stock Analysis Report
SPRINT NEXTEL (S): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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