Sprint Has Long Period of Rebuilding Ahead, Analysts Say
Sprint’s Q2 earnings report (see 1411030060) Monday was met with generally negative reaction from analysts, in emails to investors Tuesday. The quarter was the first under new CEO Marcelo Claure. Sprint said in August that Claure was replacing longtime CEO…
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Dan Hesse (see 1408070044). With continuing subscriber losses and worsening churn, Sprint is at “the start of a long process,” UBS said. Sprint lowered its EBITDA guidance, and “EBITDA trends were much worse than expected,” New Street Research said. “Sprint’s turn-around will clearly come at a higher cost than investors realized. We continue to believe Sprint is expensive, even if you assume a strong recovery in sub growth. The problem isn’t turning around the business; it is the balance sheet.” Canaccord Genuity said the results' biggest implication is “the long-awaited turnaround story will take yet more time for it to manifest itself in the form of a sustainably higher stock price.” Sprint is a company in search of a strategy, MoffettNathanson said. “SoftBank’s prior strategy of network superiority has been scaled back dramatically,” the analyst firm said. “But to what, exactly? Their new plan to fully build out their 2.5 GHz spectrum in just a handful of cities (‘three to five’) is a seemingly sensible admission that they have neither the inclination nor the money to blanket the country with a network built of small cells and high frequencies.”