Hot Tech stock to watch: Sprint Corp (NYSE: S)

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Sprint Corp (NYSE: S) stock rose 2.3% on 9th May, 2019 (as of 11:27 am GMT-4; Source: Google finance)

Sprint and T-Mobile U.S. Inc are awaiting regulatory approval on their planned $26 billion merger, which is expected to help Sprint boost its investments in 5G, the next generation of wireless, and shed the negative perception of its network quality. Last month, the two companies extended the deadline for completing their proposed deal to July 29 as the U.S. Justice Department’s Antitrust Division chief said he had not decided whether to approve the transaction. Sprint said it lost a net 189,000 phone subscribers during its fiscal fourth quarter. Analysts were expecting a net loss of 117,000, according to research firm FactSet. Net loss attributable to Sprint was $2.17 billion, in the fourth quarter ended March 31, compared with net income of $69 million, a year earlier.

S in the fourth quarter of FY 18 has reported the adjusted loss per share of 4 cents, missing the analysts’ estimates for the adjusted loss per share of 2 cents. The company had reported the adjusted revenue growth of 35.9 percent to $8.44 billion in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $8.17 billion.

S has produced 710,000 postpaid net additions for the year, an improvement of 286,000 year-over-year that was driven by growth in data devices, which offset losses in postpaid phone customers. This growth, along with a slowing decline in postpaid ARPU, contributed to the stabilization of wireless service revenue at $22.5 billion for the year, excluding the impact of the new revenue recognition standard.

Moreover, S has achieved both its gross and net cost reduction targets in the FY18. Excluding the impact of the new revenue recognition standard and approximately $350 million of merger-related costs, the company has reported approximately $1.2 billion of combined year-over-year gross reductions in cost of services and selling, general and administrative (SG&A) expenses during fiscal year 2018 and approximately $330 million of net reductions after reinvestments in network and other operational initiatives. The company is continuously looking for opportunities to improve its operational and cost efficiencies in fiscal 2019, however these improvements are expected to be fully offset by incremental costs associated with network and customer experience initiatives.

 

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