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More on Sprint Nextel (S) Q2: net losses widen to $1.37B from $863M a year ago. Contract...

More on Sprint Nextel (S) Q2: net losses widen to $1.37B from $863M a year ago. Contract customers spent $63.38/month on mobile-phone services, up $4.31 from a year earlier. Sells 1.5M iPhones, well below AT&T and Verizon. Loses another 246K contract customers, partly due to winding down of Nextel network. Shares +15.7% premarket.
Comments (6)
  • dalerabinowitz
    , contributor
    Comments (11) | Send Message
     
    Anyone care to explain to a novice investor why with such seemingly bad news the shares are up 15% in the PM??
    26 Jul 2012, 08:13 AM Reply Like
  • itsAme
    , contributor
    Comments (99) | Send Message
     
    Revenues are up and account defections are from Nextel (which they are shutting down) and not from Sprint. 39 cents of the loss is from accelerated depreciation (non cash item) and operating margins have finally turned positive. Looks like S is starting to mint cash as well. Which will help go along way with paying down their debt
    26 Jul 2012, 08:25 AM Reply Like
  • Denny_Chasteen
    , contributor
    Comments (700) | Send Message
     
    Excellent explanation, itsAme. Thank you. Was a great question as well by dalerrabinowitz. I have been trading S a long time and trying to decide whether to take profits now or not.
    26 Jul 2012, 09:06 AM Reply Like
  • skibimamex
    , contributor
    Comments (443) | Send Message
     
    As another example, $204MM of loss ($0.07) is from "impairment" (i.e. non-cash) in carrying value of Clearwire investment as Sprint essentially marks-to-market based upon CLWR share prices. At some point, CLWR stock prices wont have any more room to decline. More importantly, 60% of the iDEN discos were retained on Sprint CDMA network compared with 46% last quarter which was pleasant surprise. Churn on CDMA post-paid at 1.69% which was all-time low. In general they knocked the ball out of the park on most operating metrics. Dont worry about the headlines, those are written by interns who are also summarizing sport scores. If you are not very familiar with the important attributes that drive an investment in Sprint, you probably should not be involved in the name. Most of Sprint's losses that is reported in GAAP is the gradual disgorgement of goodwill, intangibles, and write-downs related from the ill-fated Nextel merger -- like the cow that is moving through the snake. The investment community instead focuses on operating cash flow, what company calls OIBDA (Operating Income Before Depreciation and Amortization), OIBDA margins, free cash flow, and operating metrics that are indicative/predictive of future financial results. Good luck.
    26 Jul 2012, 09:09 AM Reply Like
  • Headcoach
    , contributor
    Comments (431) | Send Message
     
    Wait! Ooops...HOLD!
    26 Jul 2012, 09:13 AM Reply Like
  • mahesh777
    , contributor
    Comments (3) | Send Message
     
    Appreciate your thought full comments...Unless you see what's behind the numbers, you just don't know what you are looking at. Thanks!
    26 Jul 2012, 10:12 AM Reply Like
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