Earnings Preview: Sprint Nextel Corp.

Sprint Nextel Corporation (S) is expected to report Q3 earnings before market open Friday, November 7, with a conference call scheduled for 8:00 am ET.

Guidance

Analysts are looking for EPS of 3c on revenue of $8.85B. The consensus range is (4c) to 8c for EPS, and $8.7B to $9.01B for revenue, according to First Call. Sprint Nextel stated when it reported its Q2 earnings results it currently expects to report higher post-paid subscriber losses in Q3 due to a seasonal uptick in churn when compared with Q208 results. The company expects sequential declines in post-paid gross adds to moderate, and expects modest pressure on post-paid ARPU for the balance of 2008. This combination of factors is expected to result in a sequential reduction in Adjusted OIBDA for Q3.

Analyst Views

Deutsche Bank stated in September that it does not believe Sprint's fundamentals have improved significantly following its Q2 results and unsuccessful attempt to issue $3B of convertible bonds. The firm raised its target to $9 from $8 but maintained a Hold rating. Oppenheimer downgraded Sprint Nextel to Underperform from Perform at the end of September. The firm downgraded the company on the belief the consumer environment will worsen in the second half of 2008.