Sprint’s revenue in fiscal 1Q17
Wall Street expects Sprint’s (S) total revenues to rise ~3.0% YoY (year-over-year) to ~$8.25 billion in fiscal 1Q17 (ended June 2017). In fiscal 4Q16, Sprint reported total revenues of ~$8.5 billion, which was an increase of ~5.8% YoY. The primary reason for this increase was due to higher equipment revenue, partially offset by lower wireless service revenue.
Sprint’s revenue growth will be determined mainly by its potential to capture market share from AT&T (T) and Verizon Communications (VZ). Sprint believes that its extensive marketing techniques are paying off, as the company gained 42,000 postpaid phone subscribers in fiscal 4Q16, compared with 22,000 in fiscal 4Q15.
By comparison, T-Mobile (TMUS) added 798,000 postpaid phone subscribers during the same quarter, signaling no signs of slowing down.
In fiscal 4Q16, Sprint aggressively marketed its equipment installment plans, which led its equipment revenues to grow ~61.9% YoY to ~$2.4 billion. The sale of used devices to third parties partially drove this increase, though these sales had a comparatively neutral impact on its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization).
With installment plans, the subscribers are required to pay for their devices in monthly installments. The growth in lease revenues and installment plan billings positively impacted the segment. In fiscal 4Q16, Sprint generated lease revenues of ~$0.84 billion, compared with ~$0.66 billion in fiscal 4Q15.
In the next part, we’ll look at how much wireless service revenue growth that we can anticipate from Sprint in fiscal 1Q17.