uploads///Telecom Sprint Q Debt Liquidity

What the Balance Sheet Says about Sprint’s Financial Health


Dec. 4 2020, Updated 10:53 a.m. ET

Sprint’s liquidity and debt

Over the last few quarters, Sprint (S) has been the only major US mobile operator that has been struggling to deliver profits. The top four major US wireless service providers are T-Mobile (TMUS), AT&T (T), Sprint, and Verizon (VZ). Sprint reported EPS of $0.02 in its fourth fiscal quarter,[1. ended March 2018] signaling a significant improvement from an EPS loss of $0.07 in the year-ago period.

Sprint reported a much-enhanced total general purpose liquidity of $12 billion at the end of its fiscal fourth quarter, which includes $9 billion of cash, cash equivalents, and short-term investments. It also has about $427 million available under vendor financing agreements that will be utilized for the procurement of 2.5 GHz (gigahertz) network equipment.

Sprint’s balance sheet is constrained with $40.9 billion of total debt and $1.8 billion of debt maturities over the next four quarters.

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Sprint’s financial strategy

Sprint’s management has noted that the company has moved ahead with the implementation of its financial plan. That mainly includes diversifying its funding sources, reducing its cost of capital, and lowering its future cash interest expenses.

As a result, liquidity initiatives have helped ease concerns over Sprint’s ability to meet its upcoming debt maturities and financing obligations.

Let’s take a look at Sprint’s competitors in this year’s first quarter. Verizon’s adjusted EPS rose 23.2% YoY (year-over-year) to $1.17. AT&T’s adjusted EPS rose 14.9% YoY to $0.85, and T-Mobile reported EPS of $0.78.

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