uploads///Telecom Sprint Q FCF

Sprint’s Free Cash Flow Trends

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Sep. 24 2018, Updated 9:30 a.m. ET

Sprint’s free cash flow

In this part of the series, we’ll be looking at Sprint’s (S) cash flows. In the first quarter of fiscal 2018, which ended in June, Sprint had adjusted free cash flow (or FCF) of $8 million compared to -$240 million in the previous quarter and $368 million in the same quarter of 2017.

During the Goldman Sachs Communacopia Conference on September 14, Michel Combes, Sprint’s CEO, spoke about the company’s capex and FCF plans. He said the company expects its adjusted FCF to be -$1 billion in fiscal 2018[1. Fiscal 2018 will end in March 2019.] but to break even in fiscal 2019.

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Combes said it will be driven by improvements in revenue as well as cost-reduction initiatives. Sprint is expected to show year-over-year improvements in revenue by the fourth quarter of fiscal 2018. It also sees its capex coming down in fiscal 2019 since it will be investing less to expand its capabilities next year.

Expected capex investments

Sprint is expecting its cash capex to be $5 billion–$6 billion, excluding leased devices, in fiscal 2018. By comparison, Verizon (VZ) is expecting its capex to be $17 billion–$17.8 billion in 2018, while T-Mobile (TMUS) is expecting its cash capex to be $4.9 billion–$5.3 billion, excluding capitalized interest. AT&T (T) is projecting its capex to be ~$25 billion.

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