NEW YORK (AP) — NEW YORK (AP) — Sprint Nextel Corp., the third-largest wireless carrier in the U.S., faces questions about its network and iPhone strategy as it reports its third-quarter results before the stock market opens Wednesday.
WHAT TO WATCH FOR: Sprint has made some bold moves recently as it tries to continue a turnaround and compete with larger carriers AT&T Inc. and Verizon Wireless. But as a serial money-loser, Sprint lacks financial flexibility, and each move is putting it more at risk.
On Oct. 14, Sprint started selling the iPhone, joining AT&T and Verizon. That should help it compete for high-paying smartphone customers, but at a high cost, as Apple charges about $600 for a phone that Sprint sells for $200. The Wall Street Journal reported that Sprint has committed to buying 30 million iPhones over the next four years, citing unnamed sources. Sprint hasn’t commented on that report, but might seek to reassure investors on Wednesday.
IPhone sales seem to have started off well, and Sprint said it set a sales record. However, the full impact of the iPhone won’t be revealed in the third-quarter report, as the phone went on sale after the end of the period.
Two weeks ago, Sprint revealed its timetable for upgrading its wireless network to fourth-generation, or 4G, speeds. It’s an expensive upgrade that will require the company to borrow money or raise capital. That revelation sent its stock down sharply, but it has since regained most of the losses.
The upgrade plans revealed that Sprint seems set to end its reliance on Clearwire Corp., which runs the network that Sprint resells today as “Sprint 4G.” Sprint owns 54 percent of Clearwire but its relationship is quite distant. Clearwire, too, is looking for more funding to upgrade its own network.
WHY IT MATTERS: Sprint has 52 million wireless subscribers, and its struggle to keep them affects pricing on other carriers. Sprint also owns most of Clearwire Corp., which is building a nationwide wireless broadband network.
WHAT’S EXPECTED: Analysts surveyed by FactSet expect Sprint to report a loss of 22 cents per share on revenue of $8.4 billion.
LAST YEAR’S QUARTER: Sprint reported a loss of $911 million, or 30 cents per share, on revenue of $8.15 billion.
