Stock Alert for Sprint Nextel Corp. (S)
  • Trade Alert for Sprint Nextel Corp. (S)
  • Stock Alert for Sprint Nextel Corp. (S)
  • " />

    Stock Alert for Sprint Nextel Corp. (S)

    Sprint Nextel Corp. (S) is a holding company, with its operations primarily conducted by its subsidiaries. Sprint Nextel is a communications company offering a range of wireless and wireline communications products and services for individual consumers, businesses, government subscribers and resellers. The Company operates in two business segments: Wireless and Wireline. The Company offers wireless and wireline voice and data transmission services to subscribers in all 50 states, Puerto Rico and the United State’s Virgin Islands. Its retail brands include Sprint, Nextel, Boost Mobile, Virgin Mobile, Assurance Wireless and Common Cents on networks that utilize third generation (3G) code division multiple access (CDMA), national push-to-talk integrated digital enhanced network (iDEN), or Internet protocol (IP) technologies. It also offers fourth generation (4G) services utilizing worldwide interoperability for microwave access (WiMAX) technology through its mobile virtual network operator (MVNO) wholesale relationship with Clearwire Corp. and its subsidiary Clearwire Communications LLC (Clearwire). As of December 31, 2010, Sprint 4G was available in 71 markets reaching more than 110 million people.

    Sprint Nextel was incorporated in 1938 and is headquartered in Overland Park, Kansas.

    Share Statistics (19-Apr-11) FY 

    2009

    FY 

    2010

    %  

    Chg

    Q4 

    2009

    Q4 

    2010

    %  

    Chg

    Symbol S Revenue, $Mn 32.26B 32.56B 0.9% 7.87B 8.30B 5.5%
    Current price $4.74 Gross marg. 49.1% 46.3% -5.7% 48.2% 45.0% -6.6%
    52wk Range: $3.70-$5.31 Oper. margin -1.8% -1.7%
    Avg Vol (3m): 61,334,100 Net margin -7.6% -10.6% 39.5% -12.5% -11.2% -10.4%
    Market Cap. 14.17B
    Shares Outstanding 2.99B EPS, $ -0.65 -1.12 72.3% -0.30 -0.30 0.0%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Sprint Nextel gained $0.04 or 0.85% Tuesday, to close at $4.74 per share. About 48.45 million shares have traded hands during the session, versus the 10-day average volume of 50.65 million.  The stock has been moving within a range of $3.70 – $5.31 over the past 52-weeks. The stock is currently trading above its 50-day moving average of $4.66 and above its 200-day moving average $4.40. Market capitalization currently stands at 14.17 billion and it has 2.99 billion outstanding shares.

    Sprint Nextel has recently agreed to pay wireless service provider Clearwire Corp. at least $1 billion over the next two years for 4G wholesale services, resolving a dispute over wholesale pricing. Sprint Nextel has committed to paying $300 million in 2011; $550 million in 2012 and $175 million in pre-payments for 4G services to be used in 2011, 2012 and beyond.

    “Sprint has been our biggest and most important customer and partner since we launched 4G services in the U.S. more than two years ago,” Clearwire interim CEO John Stanton said in a press release Tuesday. “Today’s agreement further aligns Sprint and Clearwire’s interests and lays the foundation for a continued, constructive relationship. We are pleased to have the resources and partnerships necessary to maintain our 4G leadership and leverage our significant spectrum and capacity for delivering mobile broadband services.”

    In a note to investors, analyst Mike McCormack of Nomura Equity Research said the deal “maintains the status quo” between the companies. “For Sprint, we view the agreement as a small positive, in that it allows the company some breathing room to continue discussions with LightSquared, while maintaining a 4G presence through Clearwire,” McCormack said.

    Additionally, Sprint Nextel and Clearwire reached a deal regarding wholesale pricing for Spring devices that operate on both Sprint Nextel’s 3G network and Clearwire’s 4G network. This includes smart phones such as the award-winning HTC EVO 4G and Samsung Epic 4G and other dual-mode devices like the newly introduced Novatel Wireless MiFi 3G/4G Mobile Hotspot 4082, the report said. The agreement includes usage based pricing and volume discounts and is aimed at aligning the interests of both companies to enable growth for customers using smart phones and dual-mode devices.

    In the fourth quarter of 2010, Sprint Nextel, currently the third largest carrier in the United States, had its best total company wireless subscriber additions and net postpaid additions since the first and second quarters of 2006, respectively. The Company said it added about 1.1 million total wireless subscribers driven by net postpaid subscriber additions of 58,000, which include net subscriber additions of 519,000 for the Sprint brand – and the Company’s best ever fourth-quarter prepaid net subscriber additions of 646,000. The Company also delivered postpaid churn of 1.86% – the best postpaid churn result the Company has reported in the fourth quarter of any year. In 2010, Sprint Nextel hit its best ever annual postpaid churn of 1.95%.

    Visit Sprint Nextel at www.sprint.com

    Financial Summary

    Sprint Nextel reported fourth-quarter consolidated net operating revenues of approximately $8.3 billion, which is a 6% increase from the same quarter a year ago, and an operating loss of $139 million, a 74% improvement from the year ago period. The Company also reported a net loss of $929 million and a diluted loss per share of $0.31 for the quarter.

    Full year 2010 results included consolidated net operating revenues of $32.6 billion, an operating loss of $595 million, which is a 57% improvement compared to 2009, and a diluted loss per share of $1.16.

    Sprint generated $913 million of Free Cash Flow in the quarter and $2.5 billion for full year 2010. As of December 31, 2010, the Company had nearly $5.5 billion in cash, cash equivalents and short-term investments.

    Financial Strength (19-Apr-2011) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 1.17 1.15 1.10 0.68
    Current Ratio (MRQ) 1.25 1.25 1.20 1.00
    LT Debt to Equity (MRQ) 127.42 37.63 42.89 113.38
    Total Debt to Equity (MRQ) 138.81 46.17 54.52 160.89
    Interest Coverage (TTM) -0.72 0.02 0.13 17.41

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among 35 polled investment analysts. Against the Sprint Nextel Corp company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 11 5 14 4 1 0
    4 weeks ago 12 4 14 4 0 0
    2 months ago 8 5 15 4 0 0
    3 months ago 8 6 15 4 0 0
    Last year 4 2 20 4 0 0

    The 30 analysts offering 12-month price targets for S have a median target of 5.00, with a high estimate of 12.20 and a low estimate of 3.00. The median estimate represents a 6.38% increase from the last price of 4.70.

    Source: markets.ft.com

    Consensus Estimates Analysis

    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Jun-11 24 8,181.84 8,368.00 7,945.00 7,810.87
    Quarter Ending Sep-11 24 8,095.94 8,422.00 5,201.00 7,760.73
    Year Ending Dec-11 31 32,857.30 33,568.00 32,033.00 31,199.70
    Year Ending Dec-12 30 33,335.00 34,557.00 32,212.00 31,060.50
    EARNINGS (per share)
    Quarter Ending Jun-11 28 -0.17 -0.01 -0.31 -0.13
    Quarter Ending Sep-11 28 -0.18 -0.04 -0.32 -0.12
    Year Ending Dec-11 33 -0.74 -0.19 -1.29 -0.53
    Year Ending Dec-12 31 -0.59 0.28 -1.40 -0.07
    LT Growth Rate (%) 5 -75.06 6.00 -192.00 0.47

    Technical Analysis

    Source: http://stockcharts.com

    Sprint Nextel is trading above its 20-day moving average. While this is normally considered to be a bullish sign, the moving average is downward sloping, which means that investors have been liquidating shares during this time period and tempers the bullishness of the signal.

    Sprint Nextel is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

    The MACD for Sprint Nextel currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Apr19-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    AT&T Inc. T 30.31 179.18B 12.79 11.89 1.42 1.41
    Verizon Communications Inc. VZ 37.24 105.32B 16.77 14.16 0.95 0.91
    MetroPCS Communications Inc. PCS 16.26 5.80B 16.26 13.11 1.24 1.14
    Leap Wireless International Inc. LEAP 14.89 1.17B n/a n/a 0.40 0.37
    Wireless Communications Median 18.47 n/a 1.47 n/a
    Sprint Nextel Corp. S 4.74 14.17B n/a n/a 0.43 0.43

    Source: Thomson Financial

    DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

    The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

    Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

    Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

    Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

    We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

    To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

    We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

    Leave a Reply

    Your email address will not be published. Required fields are marked *