Sprint trades lower after giving Apple iPhone details

More like a slow jog.

Sprint posted a smaller-than-expected quarterly loss; however, shares traded lower after the company said the cost associated with selling Apple's (AAPL) iPhone could hurt the bottom line for the balance of the year. The third-largest wireless provider in the U.S. saw its quarterly loss narrow to $301 million, or $0.10 per share while analysts were looking for a loss of $0.22. Net operating revenue increased to $8.33 billion from $8.15 billion a year earlier, coming in slightly below the average analyst estimate of $8.379 billion.

Looking ahead, the company expects to report net subscriber growth for 2011 after losing 44,000 subscribers in Q3. Management expects full-year free cash flow to range from a loss of $200 million to a gain of $100 million due to the high cost and low selling price of the iPhone. Sprint announced it would be offering the iPhone at its October analyst day, coming under fire for not disclosing the full cost of selling the iPhone. The company has now said that upfront costs of offering the iPhone will be roughly $2.1 billion and that it expects the iPhone to contribute to roughly 20-40% of its subscriber growth.

Separately, shares of Clearwire (CLWR) jumped after Sprint said it had made preliminary plans to extend a network leasing agreement beyond 2012, weeks after it seemed to distance itself from the network provider at Sprint’s analyst day.

Sprint Nextel (S : NYSE : US$2.51), Net Change: -0.19, % Change: -7.04%, Volume: 117,890,170

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

Comments
comments powered by Disqus