Sprint trades higher on second quarter results
Shares of Sprint (NYSE:S) traded higher by almost 5% early in the session following the release of the company’s second quarter earnings before the bell on Tuesday morning. This report marks the first release for the company following the Softbank acquisition earlier this year. Sprint’s second quarter wireless service revenue climbed by 8% to a record-high of $7.2 billion, helping operating revenue to $8.87 billion. While revenues may be strengthening, the company still hasn’t proven itself a profitable venture.
The company lost $1.6 billion as the dying Nextel brand was finally laid to rest. On June 30th the company put down the brand, in the following weeks it was successfully able to recapture 4 million of these customers and roll them into their post paid plans. The company sold approximately 1.4 million iPhones during the quarter, of these 41% of iPhone sales were to new customers, most likely attracted to Sprint’s market leading unlimited plans for smartphones. At the end of the quarter 86% of its contract phone were smartphones, this number has risen drastically over the last few years as the price points on entry level smartphones have fallen.
Going forward, Sprint has its hands full trying to compete with market behemoths At&t and Verizon. Sprint has worked hard over the last two quarters to step up its spectrum for customers. The company launched 4G LTE in 151 cities, including Los Angeles, Dallas, Atlanta, Miami and Boston. Sprint expects to provide 200 million people with LTE by the end of 2013. In the remainder of the year the street will be watching to see if the company can convince customers to switch carriers during the release of the iPhone 6 upon release. The fact Sprint can provide customers an unlimited data package, at increasing speeds, bodes well for the long term success of the brand. The 12 firms which have initiated coverage on the stock hold an average price target of $7 per share, upside potential of 18.4%.
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