Keep an Eye on These 2 Sprint Strategies In 2014

Shares of Sprint (NYSE: S  ) nearly doubled in 2013. The third-largest American telecom treated investors to an 89% gain, far ahead of the S&P 500 index's 32% return. Sprint entered 2013 as a perennially troubled and financially unsound business, but walks into 2014 with Clearwire's spectrum under its belt, and $5 billion of Softbank 's money in the pocket.

How will the revamped Sprint measure up in 2014?

The integration with Japanese peer Softbank has been fairly hands-off so far. According to Sprint CFO Joe Euteneuer, it amounts to weekly video conference meetings between Japan and Kansas, where Sprint and Softbank leaders check out "what's going on in each of our businesses and how do we learn from each other." Monthly face-to-face meetings focus on best practices, and how to drive synergies through the combined companies' economies of scale.

Wall Street analysts see Sprint reporting an adjusted net loss of $0.48 per share in 2014. That would be an improvement from the $0.94 net loss per share estimated for 2013, and the $1.41 loss per share reported in 2012. On the top line, revenues are expected to stay almost flat compared to 2013, making a two-year sales-growth trend of 1% or less.

The cash infusion from Softbank was extremely timely, because Sprint started burning cash last year. CEO Dan Hesse will have to turn this from upside down in 2014, when the current wave of expensive network upgrades runs to completion.

Sprint plans to complete its Network Vision project in 2014. That means installing 4G LTE service on three distinct network bands nationwide, then leveraging the newly installed capacity to steal customers from AT&T and Verizon. Following the Sprint-Clearwire merger, Sprint holds more spectrum bandwidth than the two larger networks combined, and now the challenge is to actually create a high-speed business advantage from these rich spectrum reserves.

S Revenue (TTM) Chart

S Revenue (TTM) data by YCharts

Sprint might not be done with big-ticket mergers quite yet. Following the game-changing combinations with Softbank and Clearwire in 2013, rumor has it that Sprint might send an official $20 billion merger bid to T-Mobile (NYSE: TMUS  ) any day now. If this deal comes to pass, the new T-Sprint would play in the same ballpark as longtime market leaders Verizon (NYSE: VZ  ) and AT&T (NYSE: T  ) , each of which sport about 100 million wireless customers. Sprint's 54 million subscribers, and T-Mobile's 45 million, add up to a third megamajor in the U.S. market.

Look for more merger rumblings in the days ahead, and keep an eye on Sprint's rapidly improving network quality and connection speeds. Sprint is definitely giving Verizon and AT&T something to worry about -- with or without a T-Mobile merger.

Will Sprint beat Verizon and AT&T this year? Maybe... but does it even matter?
Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it! But it stands to reap massive profits NO MATTER WHO ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."


Read/Post Comments (1) | Recommend This Article (6)

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 Report this Comment icon found on every comment.

  • Report this Comment On January 04, 2014, at 6:42 PM, MSFInvestments wrote:

    True article.

    Also, let's not forget the synergies in M Sons other partnerships with Sprint.

    Sprint will be $25.00 in 2014.

    Lahiem

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2783099, ~/Articles/ArticleHandler.aspx, 9/19/2014 10:06:08 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement