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Analyzing Sprint’s Cash Flow and Balance Sheet

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Sprint’s liquidity and debt

Over the last few quarters, Sprint (S) has been the only major US mobile operator struggling to deliver profits. In fiscal 2018’s third quarter (ended December 31), Sprint’s adjusted EPS fell YoY (year-over-year) to -$0.03 from $0.03. Sprint reported general-purpose liquidity of $8.8 billion at the end of the third quarter, including $6.8 billion in cash, cash equivalents, and short-term investments. The telecom company has $270 million available under vendor financing agreements, which can be used to procure 2.5 GHz (gigahertz) network equipment.

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Sprint’s balance sheet is constrained, with ~$39.9 billion in total debt and ~$2.0 billion in debt maturities over the next four quarters. In fiscal 2018’s third quarter, Sprint’s adjusted FCF (free cash flow) fell YoY to -$908 million from $525 million. The company expects adjusted FCF between -$500 million and -$1 billion in fiscal 2018. In the quarter ended December 31, Verizon’s (VZ) adjusted EPS rose ~30.2% YoY to $1.12, AT&T’s (T) rose ~10.3% YoY to $0.86, and T-Mobile’s (TMUS) rose ~23.0% YoY to $0.75.

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