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Sprint (S) Up 7.7% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Sprint Corporation (S - Free Report) . Shares have added about 7.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to their next earnings release, or is the stock due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sprint Incurs Wider-than-Expected Q4 Loss, Revenues Top
Sprint's fourth quarter 2016 net loss was $283 million or $0.07 per share compared with a net loss of $554 million or $0.14 per share in the year-ago quarter. However, fourth-quarter fiscal 2016 net loss per share of $0.07 was wider than the Zacks Consensus Estimate of a loss of $0.04.
Quarterly total revenue came in at $8,539 million, up 5.8% year over year and substantially above the Zacks Consensus Estimate of $7,966 million. Service revenues were $6,116 million, down 7% while Equipment revenues totaled $2,423 million, up a substantial 61.9%.
Operating expenses were $8,069 million, almost flat year over year. Operating income was $470 million compared with a meagre $8 million in the year-ago quarter. Adjusted EBITDA improved 24.2% year over year to $2,680 million. Adjusted EBITDA margin was 43.8% compared with 32.8% in the year-ago quarter.
Cash Flow
In the fourth quarter of fiscal 2016, Sprint generated $1,268 million of cash from operations compared with $1,294 million in the prior-year quarter. Quarterly free cash flow was $394 million compared with a mere $3 million in the prior-year quarter.
Liquidity
At the end of fiscal 2016, Sprint had $8,314 million of cash and marketable securities compared with $2,641 million at the end of fiscal 2015. Total debt outstanding, at the end of 2016 was $39,654 million compared with $33,958 million at the end of fiscal 2015. At fiscal 2016 end, the debt-to-capitalization ratio was 0.65 compared with 0.60 at the end of fiscal 2015.
Wireless Segment
Total segment revenue was $8,167 million, up 6.7% year over year. Postpaid revenues totaled $4,493 million, down 6.3%. Prepaid revenues were $1,067 million, down 11.3%. Wholesale revenues were $184 million, up 18.7%. Equipment revenues totaled $2,423 million, up a substantial 61.9%.
Wireline Segment
Segment revenues were $480 million, down 14.6% year over year. Voice revenues totaled $143 million, down 26.3%. Data revenues were $39 million, up 5.4%. Internet revenues were $276 million, down 12.7%. Other revenues were $22 million, up 46.6% year over year.
Subscribers Statistics
In the reported quarter, Sprint lost 118,000 postpaid subscribers but gained 125,000 wholesale and 180,000 prepaid customers. As of Mar 31, 2017, Sprint had 59.702 million wireless customers, up 1.5% year over year. This includes 31.576 million postpaid, 11.992 million prepaid and 16.134 million wholesale customers.
Quarterly total retail postpaid churn rate was 1.75%, up 1.7% year over year. Total retail prepaid churn rate was 4.99%, down 11.7% year over year. Total retail postpaid ARPU (average revenue per user) was $47.34, down 8.4% year over year. Total retail pretpaid ARPU was $30.08, up 8.5% year over year.
Outlook
Sprint expects fiscal 2017 adjusted EBITDA of $10.7 billion - $11.2 billion and operating income of $2 billion - $2.5 billion. Capital expenditures will be approximately $3.5 billion - $4 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
At this time, the stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is equally suitable for growth and value investors.
Outlook
The stock has a Zacks Rank #3 Hold). We are expecting an inline return from the stock in the next few months.
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Sprint (S) Up 7.7% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Sprint Corporation (S - Free Report) . Shares have added about 7.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to their next earnings release, or is the stock due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sprint Incurs Wider-than-Expected Q4 Loss, Revenues Top
Sprint's fourth quarter 2016 net loss was $283 million or $0.07 per share compared with a net loss of $554 million or $0.14 per share in the year-ago quarter. However, fourth-quarter fiscal 2016 net loss per share of $0.07 was wider than the Zacks Consensus Estimate of a loss of $0.04.
Quarterly total revenue came in at $8,539 million, up 5.8% year over year and substantially above the Zacks Consensus Estimate of $7,966 million. Service revenues were $6,116 million, down 7% while Equipment revenues totaled $2,423 million, up a substantial 61.9%.
Operating expenses were $8,069 million, almost flat year over year. Operating income was $470 million compared with a meagre $8 million in the year-ago quarter. Adjusted EBITDA improved 24.2% year over year to $2,680 million. Adjusted EBITDA margin was 43.8% compared with 32.8% in the year-ago quarter.
Cash Flow
In the fourth quarter of fiscal 2016, Sprint generated $1,268 million of cash from operations compared with $1,294 million in the prior-year quarter. Quarterly free cash flow was $394 million compared with a mere $3 million in the prior-year quarter.
Liquidity
At the end of fiscal 2016, Sprint had $8,314 million of cash and marketable securities compared with $2,641 million at the end of fiscal 2015. Total debt outstanding, at the end of 2016 was $39,654 million compared with $33,958 million at the end of fiscal 2015. At fiscal 2016 end, the debt-to-capitalization ratio was 0.65 compared with 0.60 at the end of fiscal 2015.
Wireless Segment
Total segment revenue was $8,167 million, up 6.7% year over year. Postpaid revenues totaled $4,493 million, down 6.3%. Prepaid revenues were $1,067 million, down 11.3%. Wholesale revenues were $184 million, up 18.7%. Equipment revenues totaled $2,423 million, up a substantial 61.9%.
Wireline Segment
Segment revenues were $480 million, down 14.6% year over year. Voice revenues totaled $143 million, down 26.3%. Data revenues were $39 million, up 5.4%. Internet revenues were $276 million, down 12.7%. Other revenues were $22 million, up 46.6% year over year.
Subscribers Statistics
In the reported quarter, Sprint lost 118,000 postpaid subscribers but gained 125,000 wholesale and 180,000 prepaid customers. As of Mar 31, 2017, Sprint had 59.702 million wireless customers, up 1.5% year over year. This includes 31.576 million postpaid, 11.992 million prepaid and 16.134 million wholesale customers.
Quarterly total retail postpaid churn rate was 1.75%, up 1.7% year over year. Total retail prepaid churn rate was 4.99%, down 11.7% year over year. Total retail postpaid ARPU (average revenue per user) was $47.34, down 8.4% year over year. Total retail pretpaid ARPU was $30.08, up 8.5% year over year.
Outlook
Sprint expects fiscal 2017 adjusted EBITDA of $10.7 billion - $11.2 billion and operating income of $2 billion - $2.5 billion. Capital expenditures will be approximately $3.5 billion - $4 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
Sprint Corporation Price and Consensus
Sprint Corporation Price and Consensus | Sprint Corporation Quote
VGM Scores
At this time, the stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is equally suitable for growth and value investors.
Outlook
The stock has a Zacks Rank #3 Hold). We are expecting an inline return from the stock in the next few months.