Sprint Nextel's Loud and Clear: Fool by Numbers

On Feb. 28, Sprint Nextel (NYSE: S  ) released earnings for the fourth quarter ended Dec. 31.

  • Revenue rose by 6.7% to $10.4 billion, thanks to 9% growth in revenue from the wireless segment.
  • Revenue from the long distance segment, which accounts for 16% of total sales, fell by 2% year over year. However, adjusted operating income for this segment grew 35%.
  • The company's free cash flow declined by 39.5% to $3.4 billion, led by increased capital spending on accelerated wireless network deployments. For the 2007 fiscal year, Sprint Nextel plans to devote roughly $8 billion for aggressive wireless capital investments, along with rebranding and its long-distance segment.
  • Is Sprint Nextel in your top five in Motley Fool CAPS, our free interactive stock database? With only a two-star rating, it may not be favored by many. Competitors like Verizon Communications (NYSE: VZ  ) and AT&T (NYSE: T  ) have a three-star rating. And there are lots of other companies with four and five stars supported by user commentary, awaiting your outperform or underperform call.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$10,444

$9,792

6.7%

Earnings from Continued Operations

$261

$5

5,120.0%

EPS from Continued Operations

$0.09

$0.00

N/A

Diluted Shares

2,916.2

2,979.4

(2.1%)

*Earnings from continued operations doesn't include profits from Embarq, which was spun off on May 17, 2006.

Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

59.3%

57.9%

1.4

Operating Margin

5.5%

3.0%

2.5

Net Margin

2.5%

0.1%

2.4

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$2,061

$10,666

(80.7%)

Accounts Rec.

$4,595

$4,166

10.3%

Inventory

$1,176

$776

51.5%



Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$3,463

$3,562

(2.8%)

Long-Term Debt

$21,011

$19,969

5.2%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q4 2006

Q4 2005

Change

Cash From Ops.

$10,958

$10,679

2.6%

Capital Expenditures

$7,556

$5,057

49.4%

Free Cash Flow

$3,402

$5,622

(39.5%)



Find out why Fools always follow the money.

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.


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