Sprint Corp. S reported mixed financial results in the first quarter of fiscal 2015 wherein the bottom line compared favorably with the Zacks Consensus Estimate while the top line lagged the same.
The Zacks Rank #3 (Hold) stock faces fierce competition in the U.S. wireless market from Verizon Communications Inc. VZ, AT&T Inc. T and T-Mobile US Inc. TMUS. In order to remain competitive, Sprint recently launched several low-priced data and voice plans.
Quarterly net loss stood at $20 million or 1 cent per share compared with a net income of $23 million or 1 cent per share in the year-ago quarter. First-quarter net loss per share of 1 cent was significantly narrower-than-the Zacks Consensus Estimate of a loss of 8 cents.
Quarterly total revenue came in at $8,027 million, down 8.7% year over year and also below the Zacks Consensus Estimate of $8,316 million. Operating expenses were $7,526 million, down 9% year over year. Operating income stood at $501 million compared with $519 million in the year-ago quarter. Adjusted EBITDA improved 14% year over year to $2,082 million. Adjusted EBITDA margin was 29.6% against 23.8% in the year-ago quarter.
Cash Flow
In the first quarter of fiscal 2015, Sprint generated $128 million of cash from operations compared with $679 million in the prior-year quarter. Quarterly free cash flow was a negative $2,246 million compared with a negative $496 million in the prior-year quarter.
Liquidity
At the end of the reported quarter, Sprint had $2,263 million of cash and marketable securities against $5,253 million at the end of fiscal 2014. Total debt outstanding, at the end of first-quarter fiscal 2015 was $34,130 million against $33,831 million at the end of fiscal 2014. At quarter end, debt-to-capitalization ratio was 0.61 against 0.60 reported at 2014 end.
Wireless Segment
Total segment revenue was $7,540 million, down 8% year over year. Postpaid revenues totaled $4,964 million, down 10.6%. Prepaid revenues were $1,300 million, up 6.5%. Wholesale revenues were $181 million, up 11%. Transactions revenues totaled $105 million, down by a substantial 30%. Equipment revenues were $990 million, up 10.5% year over year.
Wireline Segment
Total segment revenue stood at $630 million, down 15.5% year over year. Voice revenues totaled $233 million, down 28.8%. Data revenues were $49 million, down 12.5%. Internet revenues were $328 million, down 4.9%. Other revenues were $20 million, up 11.1% year over year.
Subscribers Statistics
In the reported quarter, Sprint gained 310,000 postpaid subscribers, 731,000 wholesale customers but lost 366,000 prepaid customers. As of Jun 30, 2015, Sprint had 56.812 million wireless customers, up 6.5% year over year. This includes 30.016 million postpaid, 15.340 million prepaid and 11.456 million wholesale customers.
Quarterly total retail postpaid churn rate was 1.56% as against 2.05% in the year-ago quarter. Total retail prepaid churn rate was 5.08% as against 4.44% in the prior-year quarter. Total retail postpaid ARPU (average revenue per user) was $55.48, down 10.6% year over year. Total retail pretpaid ARPU was $27.81, up 1.6% year over year.
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