Sprint (S) did about as much damage to itself last quarter as was possible. For starters, the company will sell $3 billion in cumulative perpetual convertible preferred stock. That is a long way of saying shareholders face substantial dilution.
Sprint’s revenue actually fell, which has to be hard to do in the cellular carrier business, since the market is growing everywhere. Revenue for the last quarter was down from $10.1 billion to $9.1 billion. The company had a net loss of $344 million.
For the quarter, free cash flow was $11 million compared to $183 million in the second quarter of 2007 and $170 million in the first quarter of 2008. Net debt at the end of the period was $19.5 billion, consisting of total debt of $23 billion, offset by cash and marketable securities of $3.5 billion.
Is it any wonder that the stock sold off almost 10% before the open?
Douglas A. McIntyre
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