Sprint (S) shares are headed lower this morning on disappointing Q3 financial results.
For the quarter, the company posted revenue of $8.2 billion, ahead of the Street at $8.03 billion. But it lost 30 cents a share, worse than the 28 cents a share the Street had expected. The company said adjusted EBITDA was down 11% from a year ago, while free cash flow was down 42%.
The company overall added 644,000 new wireless subscribers, but it lost 107,000 post-paid subs.
Bernstein Research analyst Craig Moffett this morning notes that wireless service margins of 16.6% were a “clear miss” versus his estimate of 18.2% and a Street consensus of 17.5%, and down from 18.5% a year. “The poor margin outcome plays to the worst fears about ‘buying market share,’” he writes in a research note this morning. He adds that “Sprint’s share of gross additions among the Big Three [with Verizon Wireless and AT&T] appears to have hit a wall.” Concludes Moffett: “Taken together, the results must be viewed as a sizable miss.”
S this morning is down 20 cents, or 4.1%, to $4.57.
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