Keep an Eye on These 2 Sprint Strategies In 2014

Sprint shares nearly doubled in 2013. Here's how the telecom hopes to build on that fantastic year with an even stronger 2014.

Jan 3, 2014 at 6:52PM

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 (NASDAQ: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?
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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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