Wednesday morning, wireless services provider Sprint Nextel (NYSE:S) will call in to report second-quarter earnings. While we wait on pins and needles, let's see what's on tap for the company ahead of the release.

What analysts say:

  • Buy, sell, or waffle? A total of 29 analysts follow Sprint Nextel. Five of them say shares are a buy, while 18 sit on the fence with a hold rating, and six say to sell. In our Motley Fool CAPS investor database, more than 526 of our 60,000 users have rated the stock, giving it a two-star rating overall.
  • Revenue. Wall Street is looking for Sprint Nextel to report $10.2 billion this quarter, a slight 2% increase from last year.
  • Earnings. The average analyst is expecting $0.22 per share in earnings, significantly down from last year's $0.32.

What management says:
With competitors AT&T (NYSE:T) and Verizon Wireless (a joint venture of Verizon Communications (NYSE:VZ) and Vodafone (NYSE:VOD)) still eating Sprint Nextel's lunch in the wireless business, Wall Street has been demanding more assurance that the company's turnaround plan will work. Management has pointed out that though it still has far to go, it's making progress on several fronts.

"Our plans in 2007 call for a substantial increase in the funding of business operations to build long term growth and profitability," said CEO Gary Forsee. Sprint's plans not only include putting more money into its networks, but also increasing efficiency by laying off redundant employees. The company should also save significant money over the long term by sharing the development burden of its next-generation WiMAX network with partner Clearwire (NASDAQ:CLWR).

What management does:
Sprint Nextel's operational metrics show that its wireless business has room for improvement, too. Though churn is actually beginning to fall, the company's still struggling to add customers and encourage them to pay more for services. Blended ARPU (a combination of both the post-paid and prepaid customer base) continues to fall, while other players, including regional rival Alltel (NYSE:AT), show consistent increases.

Metric

12/05

03/06

06/06

09/06

12/06

3/07

Net Subscriber
Additions*

2,021

1,338

704

233

742

568

Churn

2.3%

2.3%

2.4%

2.8%

2.7%

2.7%

ARPU

$61.24

$60.07

$59.75

$58.64

$57.55

$56.48
*In thousands. Source: Sprint Nextel.

One Fool says:
Management at Sprint Nextel is talking like the worst is past. Executives say that customer defection problems are largely mitigated, and that the company's seeing sequential improvements in a number of areas. These optimistic statements put Sprint on the spot this quarter; if continued improvements don't materialize, investors probably won't be kind.

I believe Sprint Nextel has a solid plan. It just has to swallow the bitter medicine of increased spending to make things better. The improvements will likely be gradual and modest, however, since these types of issues take years, not months, to fully work out.

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Fool contributor Dave Mock believes modesty and patience are virtues, even in the stock market. Dave is the author of The Qualcomm Equation. Vodafone is an Inside Value recommendation. The Fool's disclosure policy can sit for hours with the tastiest of hot dogs balanced on its nose, knowing that true rewards are reserved for those who wait.