Sprint Nextel Earnings Preview

Published on Tuesday, 07 February 2012 11:57 Written by Christopher Lynn

New York, February 7^th (TradersHuddle.com) – Shares of Sprint Nextel (NYSE: S), the third largest U.S. wireless carrier, were flat in the last session before the company will report its quarterly results. The company announced a partnership with Orange Business Services to extend its global machine-to-machine connectivity outside the U.S.

Sprint is scheduled to report its earnings tomorrow before the opening bell. On average analysts expect a loss of $0.37 per share on revenues of $8.68 billion. Last quarter the company posted a 54.5% upside surprise, as it loss $0.1 per share. The lowest earnings estimate is a loss of $0.49 per share, while highest earnings estimate is a loss of $0.27 per share.

Sprint has been under heavy pressure on concern over margin compression amid its deal to sell the iPhone on its network and increased investment as the company build its upgraded network. Sprint started to sell the iPhone in mid-October and should have benefited from the popular Apple iPhone 4S, which likely resulted in higher revenue per user and lower churn, however the short term pressure on earnings from the high iPhone subsidy along with commentary from the company on the long-term funding will be critical areas in which participants will pay close attention.