Sprint soars on subscriber gains, adjusted EBITDA forecast

Sprint (S +7.2%) saw a net gain of 682K mobile platform subs in seasonally strong Q4 - 58K postpaid, 322K prepaid, 302K wholesale/affiliate. Though that figure is well below Verizon and T-Mobile's Q4 net adds, and moderately below AT&T's, it represents a turnaround from Q3's 95K net loss (includes a loss 360K postpaid subs).

The #3 U.S. carrier is also guiding for 2014 adjusted EBITDA of $6.5B-$6.7B, up from a 2013 level of $5.4B and a 2012 level of $4.8B. Q4 adjusted EBITDA margin was 14.5%, up from the year-ago period's 10.3%.

Mobile service revenue rose 2% Y/Y to $7.15B, equipment revenue (phone/tablet sales) rose 15% to $1.16B. SG&A spend was nearly flat at $2.44B.

Postpaid ARPU was $64.11, down slightly from $64.24 in Q3 and $64.17 a year ago. Postpaid churn rose to 2.07% from 1.99% in Q3 and 1.98% a year ago.

Sprint's wireline division saw revenue drop 9% to $859M. Its op. income fell to $23M from $71M.

With parent SoftBank (SFTBF) willing to spend aggressively to improve Sprint's 4G coverage, Sprint has set a 2014 capex budget of $8B, up from a 2013 level of $7.5B and a 2012 level of $5.4B.

Q4 results, PR

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Comments (5)
  • BigAppleGuy
    , contributor
    Comments (204) | Send Message
    An update came a few days ago that officially enabled Spark on my LG G2. There is now a Spark icon on the activity bar. I consistently get 23Mbs down and 7 up. These speeds are currently much better than VZ and ATT can offer here in NYC (I went to their stores in my hood and ran speed test). I am also getting better service indoors, and getting 4G at places I travel frequently to that didn't have it before. The network is getting better and faster, and it is the best value of all of the providers, with the simplest, easy to understand, no hidden fee plans.
    Now is a great time to invest in Sprint. If you wait until they turn profitable, likely by 3rd-4th quarter of this year, you will miss the big move up.
    11 Feb 2014, 10:18 AM Reply Like
  • rotorite86
    , contributor
    Comments (345) | Send Message
    I would agree entirely with the increase in service indoors and more areas with 4G available where I didn't have it before (including my desk at work).
    11 Feb 2014, 12:13 PM Reply Like
  • tiger8896
    , contributor
    Comments (743) | Send Message
    Not a Sprint customer but I have a friend in Albany NY that still doesn't have 4G when V and T have had it for 2 years in that area. They are just rolling out 4G in that area and my friend frequently complains that he gets <100k dial-up speeds on the 3G network.


    It's a 3rd rate company when you hear "We are rolling out 4G as fast as we can" when they are 2 years behind in deploying it in most areas and their 3G network performs at dialup speeds.
    11 Feb 2014, 12:49 PM Reply Like
  • rotorite86
    , contributor
    Comments (345) | Send Message
    I think the key with Sprint is their customer base. They are cheaper than both VZ and ATT and offer the same phones since Sprint has had the iPhone for a few years now. If they keep growing the "low-end" customer base, which they market to in my opinion, they will continue to push higher. After all most American's are only getting poorer, and when it comes to $25-50 less per month for a not-as-good network, they take it. Myself included, and I am not in their low-end spectrum.
    12 Feb 2014, 09:44 AM Reply Like
  • Eric Kowalski
    , contributor
    Comments (14) | Send Message
    There were some interesting comments from earnings call today, but the one that struck me as unusual is that Sprint is launching markets (clusters) with seemingly less than 70% of the sites complete. If 33k sites are complete out of 39k sites which is approximately 85% of all sites completed and with >37k sites construction complete/underway that means 95% of all sites, theoretically, should be completed and on-air by the end of March 2013. The comments in the call and the information in the slide deck are contradictory which is unfortunate.


    I doubt that NWV will be finished by Q2 if they still have 30% gaps in these markets which are the most difficult sites to build. The main concern is that if NWV is delayed Spark will also be delayed (unfortunately).


    At the start of Q3 2011 Sprint promised that by the end of 2013 NWV would reach 250 POPS but they only hit 200 POPs (at least a 6 month delay).
    11 Feb 2014, 03:19 PM Reply Like
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