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Sprint Corporation (S)

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  • Feb. 11, 2014, 9:34 AM
    • 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
    | 5 Comments
  • Feb. 11, 2014, 9:10 AM
    | 1 Comment
  • Feb. 11, 2014, 7:31 AM
    • Sprint Corporation (S): Q4 EPS of -$0.26 beats by $0.07.
    • Revenue of $9.15B. (PR)
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  • Feb. 10, 2014, 3:07 AM
    • Sprint (S) is rethinking its attempt to buy T-Mobile US (TMUS) from Deutsche Telekom (DTEGF) after the Justice Department and the FCC expressed skepticism that the acquisition would be allowed, the WSJ reports.
    • Sprint could still try to purchase T-Mobile, but executives will take their time in order to refine their strategy and antitrust arguments.
    • Previous
    | 9 Comments
  • Feb. 6, 2014, 11:16 AM
    • After rallying yesterday on a report Sprint (S -6.1%) is close to lining up $45B in financing for a T-Mobile USA (TMUS -5.4%) bid, Sprint and T-Mobile are selling off following a Bloomberg report stating FCC/DOJ regulators have "resisted the concept" of a merger between the carriers in preliminary talks with SoftBank's (SFTBF) Masayoshi Son, and that Son and Sprint's Dan Hesse now "plan to decide in the next few weeks whether to move ahead on a bid."
    • Bloomberg adds Deutsche Telekom (DTEGY) has asked Son to "gauge regulatory sentiment" towards a merger, and that Son and DT's perception of regulatory feedback will "determine their next steps."
    • In addition, SoftBank and DT are reportedly at odds over the breakup fee for any deal - SoftBank wants a small one on account of regulatory risks, DT feels differently.
    • FCC and DOJ officials have already suggested they're skeptical about backing a merger between the #3 and #4 U.S. mobile carriers. While Sprint might argue the carriers need to merge to effectively compete against Verizon/AT&T, T-Mobile's recent share gains bring that claim into question.
    • More on Sprint/T-Mobile
    | 2 Comments
  • Feb. 6, 2014, 12:05 AM
  • Feb. 5, 2014, 5:30 PM
  • Feb. 5, 2014, 2:20 PM
    • Sources tell dealReporter Sprint (S +6.5%) is close to obtaining $45B in financing for a T-Mobile USA (TMUS +3.9%) bid. Both Sprint and T-Mobile shares have spiked higher in response.
    • The WSJ previously reported Sprint has received proposals from at least two banks for a bid that would value T-Mobile's equity at $31B. In addition to the financing needed to acquire Deutsche Telekom's (DTEGY) 67% T-Mobile equity stake, Sprint and parent SoftBank (SFTBF) will need funds to cover (and potentially refinance) T-Mobile's $20B debt load.
    • The report comes as DOJ/FCC officials continue taking a skeptical view of a deal that stands to reduce the number of nationwide U.S. carriers to three.
    | 12 Comments
  • Feb. 4, 2014, 3:57 AM
    • Federal Communications Commission Chairman Tom Wheeler yesterday expressed skepticism about the possibility of Sprint (S) acquiring T-Mobile US (TMUS), Reuters reports. Wheeler made his feelings known during a meeting with Sprint Chairman Masayoshi Son and CEO Dan Hesse.
    • Wheeler echoed comments that antitrust chief William Baer made last week, when the latter gave long odds that mergers between any two of the four largest cellular carriers would receive regulatory authorization.
    • However, Wheeler also said he would keep an open mind about the prospective deal.
    • Sprint argues that it needs to merge with T-Mobile US so that it can challenge the dominance of Verizon and AT&T.
    | 2 Comments
  • Feb. 3, 2014, 12:02 PM
    • Following a Q4 in which it saw disappointing net subscriber adds and intensifying competition from T-Mobile (TMUS -1%), AT&T (T -3.4%) has launched aggressively-priced plans for families looking to share 10GB/month of data between accounts while receiving unlimited talk/text.
    • A family with just two smartphones still has to pay $130/month, but each additional smartphone costs only $15/month. One important catch: Like AT&T's recent shared data plan discount and a $200 credit provided in its T-Mobile promotion, the family plans require users forgo traditional smartphone subsidies. AT&T's efforts to pare subsidy expenses are a major reason its wireless op. margin rose 690 bps Y/Y in Q4.
    • AT&T is underperforming on a bad day for equities, as are Verizon (VZ -3.4%) and Sprint (S -4.3%). While AT&T, Sprint, and (especially) T-Mobile have launched major discounts and promotions in recent months, Verizon has maintained its premium pricing strategy, betting its coverage and service quality will allow it to continue delivering industry-leading subscriber adds and margins. But fears are growing Big Red increasingly has no choice but to return fire.
    • AT&T's latest move comes days after the carrier announced a $100 credit for each new line opened by a new or existing subscriber.
    | 10 Comments
  • Jan. 28, 2014, 6:44 PM
    • The WSJ reports Sprint (S) CEO Dan Hesse and SoftBank (SFTBF, SFTBY) chief Masayoshi Son met DOJ officials this month regarding a possible T-Mobile USA (TMUS) bid, and were told a deal would be viewed "with skepticism."
    • The paper adds SoftBank and T-Mobile USA parent Deutsche Telekom (DTEGY, DTEGF) have been talking about a deal, but are still "working through remaining issues" such as the size of the deal's breakup fee (Son reportedly is pushing for a small one) and whether Sprint or T-Mobile's brand would be retained.
    • Both the DOJ and FCC have been expected to show intense scrutiny of a merger that would lower the number of nationwide U.S. carriers to three, and feature a carrier that has been upending the U.S. mobile industry with new promotions and pricing schemes.
    • TMUS -1.7% AH.
    • More on Sprint/T-Mobile
    | 9 Comments
  • Jan. 27, 2014, 1:48 PM
    • During a Bloomberg TV interview, outspoken T-Mobile USA (TMUS -0.1%) CEO John Legere provided fresh hints his firm is open to merging with Sprint (S +6.5%).
    • Legere: "We all need better scale and capability ... The question starts to be: How do you take the maverick and supercharge it? We either need more spectrum and capability and a lot more investment, or we need consolidation."
    • Sprint and parent SoftBank (SFTBF, SFTBY) have been widely reported to be lining up financing to acquire Deutsche Telekom's (DTEGF, DTEGY) 67% T-Mobile USA stake. But regulators might object to a tie-up, particularly given T-Mobile's efforts to shake up the U.S. mobile industry via aggressive/novel pricing schemes.
    • Separately, Sprint announces it has expanded its 4G LTE network to cover 40 more markets, including Milwaukee and Salt Lake City. Sprint, which is trying to neutralize Verizon and AT&T's LTE coverage leads, now offers LTE in 340 markets.
    | 7 Comments
  • Jan. 24, 2014, 12:46 PM
    • Sprint (S -3.2%) discloses it recently began implementing job cuts, and plans to record $165M in related Q4 charges. "Additional material charges" are expected in future quarters.
    • News of the cuts comes amid concerns Sprint, which is scrambling to build out its 4G LTE network and neutralize Verizon/AT&T coverage leads, continues to lose share to rivals. Verizon and T-Mobile's recent numbers have amplified those fears.
    • Separately, Sprint announces it has no plans to bring back the Nextel brand. TechCrunch reported last month the carrier is looking to reintroduce the Nextel brand to underpin its business services.
    • Sprint's Q4 results are due on Feb. 11.
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  • Jan. 19, 2014, 1:21 AM
    • SoftBank (SFTBF) and Deutsche Telekom (DTEGF) are attempting to resolve obstacles to Sprint's (S) possible acquisition of the German carrier's 67% holding in T-Mobile USA (TMUS), Bloomberg reports.
    • Such obstacles include much cash and stock SoftBank will pay - Deutsche Telekom wants the whole deal to be in cash - how Sprint and T-Mobile would be integrated, and the size of a break-up fee.
    • Softbank is looking to borrow $20B to finance the deal, which could value T-Mobile at $31B vs its market capitalization of $26B. Sprint would take on the debt.
    • More Sprint / T-Mobile deal.
    | 9 Comments
  • Jan. 16, 2014, 5:20 PM
    • The WSJ reports Sprint (S) has "received proposals from at least two banks" for financing a T-Mobile USA (TMUS) bid, and envisions valuing T-Mobile's equity at $31B (compares favorably to a current market cap of $26B).
    • Financing, of course, is only one of several challenges Sprint would face in merging with T-Mobile. The company and parent SoftBank (SFTBF) would have to negotiate a deal for Deutsche Telekom's (DTEGY, DTEGF) 67% T-Mobile stake. They would also have to win the blessing of FCC/DOJ regulators who seem to prefer having four nationwide carriers around, and appear to be pleased with T-Mobile's aggressive pricing.
    • There's also the matter of Dish (DISH -2.2%), which reportedly won't stand idly if Sprint bids for T-Mobile, and could have much less trouble winning the blessing of regulators.
    • In addition to acquiring Deutsche's T-Mobile stake, Sprint may need to backstop a possible refinancing of ~$20B worth of T-Mobile deal.
    • S +2.8% AH. TMUS +2.3%.
    | 8 Comments
  • Jan. 9, 2014, 2:42 PM
    • AT&T (T -1.9%), Verizon (VZ -2%), and Sprint (S -4.4%) are each selling off after T-Mobile USA (TMUS -1.1%) announced a credit program for defecting mobile subscribers - up to $300 in credit for trading in a phone, buying an approved T-Mobile phone, and signing up for a postpaid plan, and up to $350 to pay off termination fees - that was even more aggressive than expected. Sprint is also being pressured by a Deutsche downgrade to Hold.
    • FBR's David Nixon likely speaks for many on the Street when he expresses concerns AT&T, Verizon, and Sprint "will be forced to react to the move." Fears that T-Mobile's efforts will pressure industry margins and increase churn have already been running high. AT&T announced a smaller promotion (up to $450 in credit) last week.
    • Nixon also says CES feedback points to "surprising confidence from T-Mobile US that a merger with Sprint could be approved if argued on the right basis." T-Mobile CEO John Legere didn't rule out a future acquisition by Sprint yesterday, though he did suggest T-Mobile's brand would be maintained post-acquisition. Legere also took quite a few shots at his rivals.
    • Meanwhile SoftBank (SFTBF, SFTBY) CEO Masayoshi Son isn't mincing words regarding Sprint's challenges. In a Nikkei column, Son blasts Sprint's marketing efforts (all of the company's ad agencies have been fired), and says the carrier "has gotten used to being a loser."
    | 9 Comments
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Company Description
Sprint Corp is a communications company offering wireless and wireline communications products and services to individual consumers, businesses, government subscribers and resellers.