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Sprint’s Wireless Revenue Expected to Drop in 1Q15

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Sprint’s wireless revenue in 1Q15

In the previous part of this series, we found that Wall Street is anticipating a moderate year-over-year drop in Sprint’s (S) consolidated revenue for 1Q15. We also saw that Sprint’s wireless segment negatively impacted revenue in 4Q14. Wall Street analysts expect the trend to continue in 1Q15.

As of July 24, 2015, Wall Street expects an average ~4.3% year-over-year fall in Sprint’s wireless revenue in 1Q15. This is probably due to the company’s declining service revenue.

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Sprint’s wireless revenue in 4Q14

In 4Q14, Sprint’s wireless revenue fell ~5.8% year-over-year to ~$7.8 billion. This was due in large part to the drop in service revenue. This is a relatively stable wireless revenue stream for carriers such as Sprint, AT&T (T), Verizon (VZ), and T-Mobile (TMUS). Sprint’s service revenue fell ~8.6% year-over-year to ~$6.6 billion in 4Q14.

A robust year-over-year growth in equipment revenue couldn’t offset the fall in Sprint’s service revenue. Wireless equipment revenue grew ~14.5% year-over-year to reach ~$1.1 billion during the quarter.

Sprint’s wireless postpaid segment continued to be negatively affected by a lower unit contribution of customers and a smaller year-over-year subscriber base. We’ll look at these factors later in this series.

You can take a diversified exposure to Sprint by investing in the iShares Russell 3000 ETF (IWV). The ETF held ~0.01% in the wireless telecom company on June 30, 2015. Alternatively, you can consider investing in the iShares Russell 1000 ETF (IWB). It held ~0.02% in Sprint on the same date.

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