uploads///Telecom Sprints EPS

Sprint’s Losses Expected to Be Even Worse in Fiscal 3Q15


Jan. 22 2016, Updated 3:31 p.m. ET

Sprint’s losses in fiscal 3Q15

Sprint (S) announced yesterday that it will report its results for fiscal 3Q15 (calendar 4Q15) on January 26, 2016. Wall Street analysts anticipate Sprint’s losses to expand year-over-year (or YoY) during fiscal 3Q15. According to analysts’ consensus, Sprint’s adjusted loss per share should be ~$0.25 during the quarter. In fiscal 3Q14, adjusted loss per share was ~$0.23. Earlier, in fiscal 2Q15, Sprint’s losses declined YoY.

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The telecommunications company has had adjusted net losses each quarter since fiscal 2Q14. As you can see in the above graph, the wireless carrier’s adjusted losses were higher than what Wall Street had anticipated in fiscal 2Q15 and fiscal 4Q14. However, in this metric, Sprint positively surprised Wall Street analysts by lower-than-anticipated losses in fiscal 3Q14 and fiscal 1Q15.

YoY margin expansion for Sprint in fiscal 3Q15

On the positive side, Wall Street analysts expect Sprint’s adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) margin to improve YoY in fiscal 3Q15. According to their consensus, Sprint’s margin figure is expected to increase from ~11.6% in fiscal 3Q14 to ~16.8% in fiscal 3Q15.

Earlier, this margin figure improved YoY from ~16.3% in fiscal 2Q14 to ~25.2% in fiscal 2Q15. Adoption of Sprint’s leasing plans positively affected this margin during the quarter.

For a diversified exposure to the top four US wireless players, you can consider investing in the iShares US Telecommunications ETF (IYZ). You should note that together, AT&T (T), Verizon (VZ), T-Mobile (TMUS), and Sprint (S) made up ~32% of IYZ as of December 31, 2015.


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