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How Does Sprint’s Liquidity Position Look?

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Sprint’s liquidity and debt

Over the last few quarters, Sprint (S) has been the only major US wireless carrier that has been struggling to deliver profits. Sprint reported adjusted EPS of -$0.04 in the fourth quarter of fiscal 2018 (quarter ended March 31) as compared to adjusted EPS of $0.02 in the fourth quarter of fiscal 2017.

Sprint reported total general purpose liquidity of $9.8 billion at the end of the fourth quarter of fiscal 2018, which includes $7.0 billion of cash, cash equivalents, and short-term investments. In addition, Sprint has $100 million available under vendor financing agreements, which can be utilized for the procurement of 2.5 GHz network equipment.

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Sprint’s balance sheet is constrained with $39.9 billion of total debt with $3.0 billion of debt maturities over the next four quarters. In the fourth quarter of fiscal 2018, Sprint reported adjusted free cash flow (or FCF) of -$539 million compared to -$908 million in the previous quarter and -$240 million in the fourth quarter of fiscal 2017.

Peer comparison

In comparison, T-Mobile’s (TMUS) adjusted EPS rose ~35.9% YoY to $1.06 in the quarter, which ended on March 31, while AT&T’s (T) adjusted EPS grew ~1.2% YoY to $0.86.

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