uploads///Telecom Sprint Q Debt Liquidity

Analyzing Sprint’s Financial Position and Liquidity


Feb. 1 2018, Updated 7:32 a.m. ET

Sprint’s liquidity and debt

Over the last few quarters, Sprint (S) has been the only major US wireless service provider to struggle to generate profits. The top four major US wireless service providers are T-Mobile (TMUS), AT&T (T), Sprint, and Verizon (VZ).

In fiscal 2Q17 (the quarter ended September 2017), Sprint reported a net income of -$48 million compared to its net income of -$142 million in the corresponding period of the previous year. The company reported an EPS (earnings per share) loss of $0.01 in fiscal 2Q17, signaling a significant improvement compared to its EPS loss of $0.04 in fiscal 2Q16.

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Sprint reported greatly enhanced total general purpose liquidity of $11.4 billion at the end of fiscal 2Q17, including $6.4 billion in cash, cash equivalents, and short-term investments. The telecom company also has ~$855 million available under vendor financing agreements that it will utilize for the procurement of 2.5 GHz network equipment.

Sprint generated $420 million in adjusted FCF (free cash flow) in fiscal 2Q17. The company’s balance sheet is constrained by ~$38.4 billion in total debt, and it has ~$0.63 billion in debt maturities coming up over the next four quarters.

Sprint’s financial strategy

According to Sprint’s management, the company has moved ahead with the implementation of its financial strategy. This strategy mainly includes the diversification of its funding sources, the reduction of its cost of capital, and the lowering of its future cash interest costs.

Sprint’s liquidity initiatives have helped to ease concerns over its capability to meet upcoming debt maturities and financing obligations.


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