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

    Sprint Nextel Corp. (S) offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. It served more than 52 million customers at the end of the second quarter of 2011 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; offering industry-leading mobile data services, leading prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. The Company operates two reportable segments: Wireless and Wireline.

    Share Statistics (23-Mar-12)   FY

    2010

    FY

    2011

    %

    Chg

    Q4

    2010

    Q4

    2011

    %

    Chg

    Symbol S Revenue, $Mn 32.56B 33.68B 3.44% 8.30B 8.72B 5.06%
    Current price $2.74 Gross marg. 46.28% 43.54% -5.92% 45.00% 37.90% -15.78%
    52wk Range: $2.10-$6.45 Oper. margin 0.00 0.22 0.00 -0.05
    Avg Vol (3m): 44,504,400 Net margin -10.64% -8.58% -19.36% 11.20% 14.94% 33.39%
    Market Cap. 8.21B              
    Shares Outstanding 3.00B EPS, $ -1.12 -0.91 -18.75% -0.30 -0.41 36.67%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    S dropped 5.2% in the last five trading days; though the stock gained 8.7% in the last month.  Year-to-date, the stock is down nearly 40%.

    Share price of  the Overland Park, Kansas-based company stood at $2.74 Friday, remaining unchanged from the previous session.  Nearly 27 million shares exchanged hands during the session, versus the 10-day average of over 55 million.

    S saw heavy trading earlier this month after the telecom giant said it canceled a spectrum hosting agreement with LightSquared. High quality global journalism requires investment. Under the agreement signed in June last year, S agreed to deploy and operate an LTE network using its ‘Network Vision’ infrastructure capable of utilizing the 1.6 GHz spectrum licensed to or available to LightSquared. The deal contained contingencies related to possible interference issues with LightSquared’s spectrum, including S’s right to terminate the agreement if certain conditions were not met by LightSquared.

    S returned $65 million in prepayments LightSquared made to cover costs that were not ultimately incurred by the Company.

    “Sprint has been and continues to be supportive of LightSquared’s business plans and appreciates the company’s efforts to find a resolution to the interference issues impacting its ability to offer service on the 1.6 GHz spectrum. However, due to these unresolved issues, and subject to the provisions of the agreement, Sprint has elected to exercise its right to terminate the agreement announced last summer. We remain open to considering future spectrum hosting agreements with LightSquared, should they resolve these interference issues, as well as other interested spectrum holders,” the Company said in a statement.

    Source:

    http://newsroom.sprint.com/news/

    Financial Summary

    S reported consolidated net operating revenues of $8.7 billion for its fourth quarter, a 5% increase from the fourth quarter of 2010 and the third quarter of 2011. The Company attributed the quarterly year-over-year and sequential improvements to higher wireless service and equipment revenue, which was offset by a reduction in wireline revenue.

    The Company reported adjusted OIBDA (operating income/(loss) before depreciation and amortization) of $842 million for the quarter, compared to $1.3 billion for the fourth quarter of 2010 and $1.4 billion in the third quarter of 2011. The quarterly year-over-year decline was primarily due to higher equipment net subsidy and sales expense, higher wireless cost of service and lower wireline revenues, partially offset by higher postpaid and prepaid wireless service revenues. Sequentially, quarterly adjusted OIBDA declined primarily as a result of higher equipment net subsidy and sales expense, partially offset by higher postpaid wireless service revenues and lower wireless cost of service. Based on internal estimates, including incremental costs associated with iPhone sales, the combined impact of iPhone and Network Vision costs reduced fourth quarter adjusted OIBDA of $842 million by approximately $684 million.

    S had free cash flow of $257 million for the quarter, compared to $913 million for the fourth quarter of 2010 and negative $273 million for the third quarter of 2011.

    Source:

    http://newsroom.sprint.com/article_display.cfm?article_id=2179=

    Financial Strength (23-Mar-2012)

    Company

    Industry

    Sector

    Quick Ratio (MRQ) 1.45 1.33 1.29
    Current Ratio (MRQ) 1.59 1.45 1.42
    LT Debt to Equity (MRQ) 177.35 37.25 44.92
    Total Debt to Equity (MRQ) 177.42 49.81 56.24
    Interest Coverage (TTM) -0.22 0.02 0.11

    Source: Reuters.com, SEC Filings.

    Technical Analysis

    Source: http://stockcharts.com

    S is within its Bollinger Bands. This is a normal condition suggesting that it is neither overbought nor oversold relative to the recent levels.

    S’s MACD is indicating a weak bearish signal. Although the indicator is above the critical level of 0, which implies that the underlying moving averages are bullish, the MACD has crossed below its 9minute moving average or signal line. This suggests that positive momentum has begun to slow.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Mar23-2012 symbol Share, $ $ Mn 2012 2013 2012 2013
    AT&T Inc. T 31.52 186.87B 13.41 12.41 1.46 1.43
    Verizon Communications Inc. VZ 39.42 111.78B 15.83 14.18 0.97 0.94
    Wireless Communications Median       13.56 n/a 1.04 n/a
    Sprint Nextel Corp. S 2.74 8.21B n/a n/a 0.23 0.23

    Source: Thomson Financial

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