Sprint Nextel's Loud and Clear: Fool by Numbers (S)

Sprint Nextel's Loud and Clear: Fool by Numbers

By Motley Fool Contributors | More Articles
March 1, 2007 | Comments (0)

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.

Related Foolishness:

Small caps. Large caps. Fool CAPS! The Motley Fool's investor-intelligence community rates thousands of stocks to help you improve your own stock selections. Join today for a fun new way to research stocks.

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.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.