Tags: Sprint | nextel | s | wireless | verizon

Sprint: A Faded Star Regains Its Luster

By    |   Friday, 13 May 2011 02:16 PM

Sprint Nextel (S), the No. 3 U.S. wireless-service provider, has seemingly faced nothing but problems since the 2005 merger between Sprint and Nextel.

But now things are finally starting to look up for the company. It is making headway with its cellphone service and doesn’t have to worry about being attached to a larger local fixed-line company like its bigger competitors, AT&T (T) and Verizon (VZ).

Sprint reported that its net loss shrank by almost half in the first quarter, to $439 million from $865 million a year earlier, beating analyst estimates. Sales rose 2.8 percent to $8.31 billion, also exceeding expectations.

The company cut operating expenses by 2.6 percent to $8.05 billion. Its average monthly revenue per subscriber climbed to $56 from $55 a year ago, again beating predictions.

The churn rate of postpaid customers — those who sign two-year contracts — dropped to a record low of 1.81 percent from 2.15 percent a year earlier. Sprint lost only 114,000 postpaid customers in the quarter, less than one-fourth of the 578,000 customer total a year earlier.

And it added 846,000 prepaid customers, up from 348,000 a year earlier. Postpaid customers bring in more revenue of course, as they commit to higher payments for a longer period.

Sprint also benefited from a $10 monthly fee for smartphone users, implemented in January. The fact that the fee didn’t curb customer usage shows Sprint’s prices are very competitive.

A valuation play

Standard & Poor’s analyst James Moorman has a four-star buy rating on the stock. “Our buy recommendation is largely based on valuation,” he writes.

“In our view, the company is in a transition, trying to regain favor with customers as competitors take market share. We believe … the company is making progress in improving its network quality and customer satisfaction, and we expect positive net subscriber additions in 2011.”

© 2017 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Companies
Sprint Nextel (S), the No. 3 U.S. wireless-service provider, has seemingly faced nothing but problems since the 2005 merger between Sprint and Nextel. But now things are finally starting to look up for the company. It is making headway with its cellphone service and doesn...
Sprint,nextel,s,wireless,verizon,
308
2011-16-13
Friday, 13 May 2011 02:16 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved