Sprint (S): Q4 Earnings Preview

February 9, 2010 2:30 PM EST

Shares of Sprint Nextel Corp. (NYSE: S) are trading higher ahead of the company's fourth quarter earnings release, expected before the market opens on Wednesday, February 10, 2010. Shares are up 3.13% to $3.62 in the mid-afternoon session.

Shares of Sprint have seen a 100% rise through 2009, from a close of $1.83 on December 31, 2008 to a close of $3.66 on December 30, 2009. Through Q409, Sprint saw a moderate decline of 7%. Shares are currently trading down about 1% YTD.

The company is expected to report a loss of $0.19 for Q409, on revs of $8.03 billion.

Data from Bloomberg shows us that 8 analysts have a Buy rating on the stock, 23 have a Hold, and 4 recommend to Sell Sprint.

The analyst consensus price is $4.65. The 'Street high' price is $8.00, and the low is $2.50.

Sprint posted a slightly wider loss than expected on lower than estimated revs for Q309, and beat the Street on earnings for Q408.

News Through Q409
Sprint acquired iPCS at a rate of $831 million, or $24 per share, back in October. Sprint also assumed $405 million in debt in the transaction.

Sprint said that it is taking actions in Q409 to reduce internal and external labor costs by $350 million on an annualized basis.

The actions would include elminating 2,000 - 2,500 positions within the company.

Sprint also contributed to a $1.56 billion equity raise by Clearwire (NASDAQ: CLWR).

Sprint also reiterated its commitment to 4G technology from CEO Dan Hesse's comments and naming Matt Carter to President of 4G. Click here for more color on Carter.

Analysts Through Q409
November saw S&P put Sprint's credit rating on CreditWatch Negative list.

Credit Suisse upgraded S to Outperform from Neutral, and an increased price target of $6 up from $4. Click here for more color from Credit Suisse.

December had Wells Fargo resuming coverage with a Market Perform rating and valuation range from $3.30 - $4.20. Their estimate included the recent acquisition of Virgin Mobile, which was completed in November 2009.

Pali Research downgraded Sprint from Buy to Neutral. Click here for more color.

Citi upgraded to Buy from Hold, with a raised price target of $5.00 - $5.50.

Summary
Sprint is still a strong contender in the highly-competitive wireless community, and certainly at the forefront of the 4G revolution. Look for a decent report resulting from the labor cuts, which should play out nicely into FY10. Additionally, Sprint may make a move to carry Apple's (NASDAQ: AAPL) iPhone, which would certainly add to the company's top line and subscriber base.

Sprint will issue its Q409 results via press release at approximately 7:00 AM (EST) on February 10, 2010. Stay tuned to StreetInsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.

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