uploads///Sprint

Sprint Loses Stock, Keeps Loyal Customers

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Aug. 3 2019, Updated 10:11 a.m. ET

Sprint (S) stock fell 5.8% at the news of a Texas lawsuit opposing the Sprint–T-Mobile merger deal on August 1. The company closed at $6.76 on August 2. Sprint reported its earnings results for the first quarter of fiscal 2019, where the quarter ended on June 30, before the market opened on August 2.

The company’s net revenues rose 0.2% year-over-year to $8.14 billion in the first quarter of fiscal 2019, which beat analysts’ expectation of $8.06 billion. In the first quarter of fiscal 2018, Sprint reported revenues of $8.13 billion. In the fourth quarter of fiscal 2018, Sprint reported revenues of $8.44 billion.

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Q4 2018 to Q1 2019 show promise

Sprint reported adjusted EPS of -$0.03 in the first quarter of fiscal 2019, beating the analysts’ consensus estimate of -$0.04. In the first quarter of fiscal 2018, the company reported adjusted EPS of $0.04. By the fourth quarter of fiscal 2018, the company’s adjusted EPS reached -$0.04. Analysts expect Sprint’s sales and adjusted EPS to be $33.0 billion and -$0.16 in fiscal 2019, with the year ending in March 2020.

However, Sprint’s adjusted EBITDA fell 7.3% year-over-year to reach $3.04 billion in the first quarter of fiscal 2019. The company’s adjusted EBITDA margin also fell to 54.7% in the first quarter of fiscal 2019 from 57.1% in the year-ago quarter.

In comparison, AT&T’s (T) adjusted EPS fell 2.2% year-over-year to $0.89 in the quarter ended June 30. However, T-Mobile’s (TMUS) adjusted EPS rose 18.5% year-over-year to $1.09.

Sprint customers remain loyal

In the first quarter of fiscal 2019, Sprint gained 134,000 postpaid net customers, which includes net losses of 128,000 postpaid phone customers—lower than analysts’ expectation of 150,000 net losses. The company also lost a net 169,000 prepaid customers. Sprint reported a postpaid phone churn rate of 1.78% in the first quarter of fiscal 2019, which was more than its rate of 1.55% in the first quarter of fiscal 2018.

In comparison, T-Mobile and AT&T gained 710,000 and 72,000 postpaid phone net customers, respectively, in the second quarter of fiscal 2019.

Shareholder returns strong

Sprint has delivered a return of 16.2% year-to-date as of August 2. T-Mobile and AT&T have risen 22.2% and 19.7%, respectively. On August 2, Sprint’s closing price was $6.76 per share. The stock is trading 24.3% above its yearlong low of $5.44 per share and 16.1% below its yearlong high of $8.06 per share.

Sprint stock has fallen 15.4% in the last five trading days and 1.7% in the trailing one-month period. However, the company’s stock has risen 19.4% in the trailing twelve-month period.

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