) reported first quarter 2014 adjusted net loss per share of 4
cents, narrower than the Zacks Consensus Estimate of a loss of 6
cents. The loss incurred has also tapered from 21 cents loss per
share a year ago.
The company reported net loss of $151 million, representing a
77% improvement from a loss of $643 million in the year-ago
quarter. The betterment can be attributed to the significant rise
in adjusted EBITDA.
Quarterly operating revenues inched up 1% year over year to
$8,875 million and surpassed the Zacks Consensus Estimate of
Adjusted EBITDA of $1.84 billion increased 22% year over year
in the first quarter owing to accelerated wireless adjusted
operating revenues were $8,254 million in the quarter, up from
$8,089 million in the year-ago quarter. The company recorded
service revenues of $7,255 million, down from $7,276 million in
the year-ago quarter due to decline in retail service revenues
and impact of the Nextel platform shutdown.
Sprint lost approximately 383,000 million subscribers in the
reported quarter, representing net loss of 595,000 retail
subscribers and gain of 212,000 wholesale and affiliate
The Sprint platform lost 231,000 post-paid customers. With
regard to prepaid subscription, Sprint lost 364,000 users.
At the end of the first quarter, the company had approximately
54.9 million customers (comprising 30.5 million post-paid, 15.8
million prepaid and 8.6 million wholesale and affiliate) compared
with 55.2 million in the year-ago quarter.
Wireless post-paid average revenue per unit (ARPU) increased
to $62.98 from $62.47 in the year-ago quarter. Prepaid ARPU
increased to $27.07 from $26.08 in the year-ago quarter.
The Sprint platform post-paid churn (customer switch) rate was
2.18% in the reported quarter, compared to 2.09% in the year-ago
quarter. The Sprint platform prepaid churn deteriorated to 4.35%
from 3.26% in the prior-year quarter.
During the reported quarter, Sprint sold 5 million
smartphones, representing 84% of the total handset devices sold
in the first quarter.
revenues dropped to $770 million from $893 million in the
year-ago quarter owing to poor performances by data, Internet and
At quarter end, Sprint had approximately $6,364 million in
cash and cash equivalents compared with $6,275 million in first
quarter 2013. Net debt increased to $26.6 billion from $25.5
billion at the end of 2013. The company incurred capital
expenditure of $1,488 million in the first quarter compared with
$1,381 million in the corresponding year-ago quarter.
For 2014, the company expects adjusted EBITDA in the range of
$6.7-$6.9 billion, up from previous forecast of $6.5-$6.7
billion. Capital expenditure estimate is maintained at $8
Sprint currently has a Zacks Rank #3 (Hold). We believe
Sprint's near future remains challenged by the dilutive impact of
the Network Vision program and subscriber headwinds due to
re-certification of the Lifeline service.
However, Sprint's efforts to taper its losses supported by a
strong wireless business with reducing churn, improving ARPU,
increasing penetration of handsets, service offerings and
spectrum acquisitions from Clearwire and
United States Cellular Corp.
) transactions remain accretive. Nevertheless, increased
competition from carriers like
Verizon Communications Inc.
) heavy investments, and continued wireline margin erosion keep
us cautious on the stock.
SPRINT CORP (S): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
US CELLULAR (USM): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
To read this article on Zacks.com click here.