Sprint Corp. (S – Free Report) reported mixed financial results for the third quarter of fiscal 2016 (ended Dec 31, 2016). The company’s bottom line was far below the Zacks Consensus Estimate. Revenues beat the Zacks Consensus Estimate.
This Zacks Rank #3 (Hold) stock faces fierce competition in the U.S. wireless market from the likes of Verizon Communications Inc. (VZ – Free Report) , AT&T Inc. (T – Free Report) and T-Mobile US Inc. (TMUS – Free Report).
Quarterly net loss was $479 million, or 12 cents per share compared with net loss of $836 million, or 21 cents per share, in the year-ago period, reflecting an improvement of $357 million, or 9 cents. Also, fiscal third-quarter adjusted net loss per share was wider than the Zacks Consensus Estimate of a loss of 8 cents.
Quarterly total revenue came in at $8,549 million, up 5.45% year over year and ahead of the Zacks Consensus Estimate of $8,262 million. Service revenues were $6,323 million, down 5.4% while Equipment revenues totaled $2,226 million, up a substantial 56.3%.
Operating Metrics
Operating expenses were $8,238 million, down 0.8% year over year. Operating income of $311 million in the quarter compared to an operating loss of $197 million in the year-ago period, reflecting an improvement of $508 million. Adjusted EBITDA was $2.5 billion in the quarter compared with $1.9 billion in the year-ago period, reflecting an increase of approximately $552 million or 29%.
Cash Flow
In the third quarter of fiscal 2016, Sprint generated $650 million of cash from operations compared with $806 million in the year-ago period. Adjusted free cash flow was negative $646 million compared with positive $339 million in the year-ago period. The prior-year quarter included $1.1 billion of proceeds from the first sale-leaseback transaction with Mobile Leasing Solutions, LLC (MLS), while this quarter included a cash outflow of approximately $370 million related to the repurchase of the devices sold in the first MLS transaction.
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