Can Sprint Turn Itself Around This Quarter With Earnings?

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Sprint Corp. (NYSE: S) is scheduled to report its second-quarter financial results before the markets open on Tuesday. The most recent consensus estimates from Thomson Reuters are a net loss of $0.28 per share on $8.69 billion in revenue. The same period from the previous year had a net loss of $0.46 per share on $8.84 billion in revenue.

Sprint calls its latest plan “All-In” pricing. The plan includes a smartphone plus unlimited voice, text messaging and data. The plan’s price for voice, text and data is $60, plus $20 a month for a two-year lease on a smartphone, for a total of $80. The smartphone choices are the Galaxy S6 from Samsung Electronics and the iPhone 6 from Apple Inc. (NASDAQ: AAPL). There is also a one-time activation fee of $36 and the inevitable taxes and surcharges that can add as much as another 10% to a subscriber’s monthly bill.

Sprint included with its announcement a direct comparison with several plans from other carriers, including T-Mobile’s Jump On Demand plan that was introduced recently. In dollar terms, the two plans are very close, especially if a Sprint customer chose to pay the $10 monthly fee for the company’s early upgrade option. On the Galaxy S6, the Sprint price for its All-In plan is $90 a month, including the early upgrade, compared with $108.33 for T-Mobile’s latest offering.

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Independent research firm Argus noted just after first-quarter earnings that it believes the critical point is to turn around subscriber acquisition, or to sign up more customers than are leaving the service. Sprint lost 430,000 high-value postpaid phone subscribers in in the 2014 fiscal year, much better than the 1 million-plus losses during the shutdown of the iDEN network and Network Vision upgrade, but still a far cry from net additions. Looking to the future, Argus widened its 2015 fiscal year loss forecast to $0.28 from $0.17, and the firm established a 2016 fiscal year loss forecast of $0.26 per share.

In the first-quarter earnings report, Sprint gave its outlook for the 2015 fiscal year as expected adjusted EBITDA between $6.5 billion and $6.9 billion and capital expenditures of roughly $5 billion.

During the first quarter, Sprint had 1.2 million platform net additions, compared to net losses of 383,000 in the same quarter in the previous year. Postpaid net additions contributed 211,000, compared to net losses of 231,000 in the prior year quarter.

The analysts from RBC see the company actually adding to the net postpaid customers and have raised their estimates from 35,000 to 160,000 net new postpaid adds. They also changed the average revenue per user, or ARPU, estimates to better reflect ongoing strength in tablets and late-June migrations from Virgin/Boost to Sprint postpaid. The stock stays at a Sector Perform rating, but the price target goes from $5 to $6.

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Shares of Sprint were up 0.7% at $3.40 on Monday afternoon. The stock has a consensus analyst price target of $7.28 and a 52-week trading range of $3.10 to $7.48.