Sprint loses a little bit of money
Holy…okay. So here’s the deal. Sprint just posted their final sales numbers for the 4th quarter of 2007, and the results are a bit shocking. Sure, we all know that Sprint has been in a bit of a downward spiral for quite some time now, but it seems the real gravity of the situation has escaped everyone…until now. Over the course of 2007, Sprint lost $29.5 billion. That’s a lot of money, but here’s the real kicker. Ready? Sprint is currently valued at $23 billion. Is this sinking in yet? We can be a bit more clear, just for the sake of argument. During the 4th quarter of 2007, Sprint lost over $6 billion more than it’s worth. We’re not economists here, but all signs point to "Woops!" Sprint is in trouble, and no amount of $99 unlimited plans sold is going to stop the bleeding. We’re sure there’s some charitable soul out there willing to spend a couple hundred thousand on your remaining assets, and you can work towards making back some of the lost revenue by embarking on a speaking tour entitled "How to Completely Ruin a Company in 12 Months."
On Feb 29, 2008 @ 12:31 am, mingkee Said:
it’s about time T-Mobile to buy 20MHz of spectrum nationalwide
this can save Sprint
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On Feb 29, 2008 @ 1:48 am, Chase Said:
Holy hell Sprint is in more trouble than I thought.
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On Feb 29, 2008 @ 1:50 am, VCI_Cell Said:
Something like 90% of that loss wasn’t actual cash, guys, but was a result of the goodwill write-off from the Nextel acquisition. Sprint’s not going to collapse overnight.
You might want to, I don’t know, mention that in the post. Considering, you know, you’re … reporters.
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On Feb 29, 2008 @ 1:52 am, VCI_Cell Said:
^ Didn’t mean that to sound quite as sharp as it did; I apologize. I love BGR, but you guys really do a good job of dogging Sprint.
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On Feb 29, 2008 @ 2:53 am, Chase Said:
Even with this good will write off these are still horrible numbers, and while I agree Sprint is not going anywhere soon this still is not helping them.
cellformer
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On Feb 29, 2008 @ 5:38 am, b.N Said:
In response to VC,
Karp is just reporting the story and despite your personal feelings on how he has presented it, share price speaks louder than words. In June they were worth $23 a share and as February wraps up they are worth $8. They have an insanely high p/e ratio even as their ship continues to sink.
Maybe if there were a few tougher voices Sprint wouldn’t be in the situation it is now. It’s not going to go belly up, but it is a shell of its once formal self and it wasn’t due to a “tough market” (their excuse several quarters back), just poor leadership.
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On Feb 29, 2008 @ 6:00 am, Jordan Brown Said:
GM just did the same thing.. Headlines were “GM announces biggest lose ever” and things of this nature. Same situation as Sprint.
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On Feb 29, 2008 @ 7:37 am, GT Said:
I personally can’t wait for the day they throw in the towel. I think VZW is just waiting for the right oppertuinity o acquire them. Personally, if you couldn’t tell by know, I don’t like sprint. They are the most comapny towards their long time customers. I’ve been with TMO for 4 month now and I’ve been treated like royalty everytime I had to call about anything. My call was answered in less than 2 min. and the issue resolved in inder 5 min. I was with sprint for 10 yrs and calling them was like a root canal without sedatives. The reported loss, technically speaking, is write off from nextell merger as previous posters implied but it is also lost revenue. People are leaving srpint like it was on fire. Outdated devices and bad customer service are just the preamble in the bankruptcy chapter. This is not the CEO’ fault as the ship was sinking way before he took charge, he accelerated the process with the nextell acquisition that’s all.
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On Feb 29, 2008 @ 8:22 am, Kevin Said:
Remember Sprint PCS? Thats when I got my first phone! They had some really cool phones back then! But terrible customer service has ALWAYS dogged Sprint! They always get bills wrong, usually overcharging the customer, and then never fix it on the first call! Thats why customers are leaving! Nextel? That fad is over!
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On Feb 29, 2008 @ 8:27 am, mr.gadget Said:
They need start taking a good long look @ the customer agents and sales reps. To slow the heavy lost of customers and money they need to revaluate they operations procedures sooner than later.
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On Feb 29, 2008 @ 8:52 am, Forza Said:
As stated earlier this is a non chash charge and it has nothing to do with their current financial decision. It basically means they over spent for Nextel and it’s assets. With out the charge sprint would have lost only like 15 million or so - not that it’s good or anything.
And i can’t understand people who wish for a carrier to go under. Who the heck wants less competition and less choice? It’s like people want just two dominant carriers so they can get raped every day of the week. People should be hoping for that Sprint can pull a turn around so there are numerous choices for everyone.
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On Feb 29, 2008 @ 9:09 am, DaveB Said:
All of you talking about how many customers are leaving have what evidence to show that? Or you’re just Sprint-bashers?
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On Feb 29, 2008 @ 9:15 am, Forza Said:
And one more comment to Joshua Karp. You mentioned you’re not an “economist” and it clearly shows in your reporting of the Sprint financials. I suggest you actually do some reading and investigating and learn about terms like free cash flow and OIBDA before trying to rail on your most hated CDMA carrier again.
In fact do us all a favor and just stick to reviewing phones and stay away from the meaty stuff. You clearly are out of your league in some areas.
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On Feb 29, 2008 @ 10:08 am, GT Said:
“But the telco’s Jan. 8 07 preannouncement stood out as perhaps the worst since the 2004 merger was announced. Sprint Nextel (S) announced it actually lost 306,000 postpaid customers in the fourth quarter of 2006, seasonally the year’s strongest period. … Forsee expects to lose customers again in the first quarter of 2007.”
And the trend continued for 1st, 2nd, 3rd, and 4th quarter 07. So its not just sprint bashing bad customers service and outdated devices translated to numbers. Do not get me wrong, I don’t want a single Sprint employee to lose their job and have to suffer, but the writting is on the wall.
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On Feb 29, 2008 @ 10:12 am, GT Said:
Oh here is a bit more, more recent news, in the 4th qtr 07 they lost 683,000. And they (Sprint) are expecting to lose 400,000 more in the first qtr 08.
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On Feb 29, 2008 @ 10:32 am, M to the K Said:
As many people here have already stated, most of the loss was related to a goodwill write-down resulting from their acquisition of Nextel. In case some of the ppl here aren’t familiar, goodwill is an infinite-life intangible which has no finance or cash flow value. And anyway, since Sprint has been having a terrible year, it makes sense for them to want to “clean house” and get rid of lots of balance sheet crap. Granted, this will affect their earnings for this year, but it shouldn’t affect their credit ratings (financial institutions don’t even look at goodwill on the books), and won’t result in the company going under.
Just 2 cents from an auditor
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On Feb 29, 2008 @ 11:15 am, Galvatron Said:
they also have a nasty habbit of overbilling too ther wa a class action lawsuit years ago regarding that.
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On Feb 29, 2008 @ 11:34 am, Jesse Said:
This was a non-cash charge against income. Their cash flow is still okay since their credit rating is staying put. We will have to see what the next 12-18 months bring.
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On Feb 29, 2008 @ 2:13 pm, kanebb Said:
The posters on this thread are coming out swingin lol as a sprint customer I’m ride this thing out t-mobile is the worst carrier of them all everyone I know with them has problems at&t don’t have insurance for there high end phones and verizon cripples most of there phone features
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On Feb 29, 2008 @ 3:49 pm, GT Said:
what about the shrinking subscriber base, this is even reported by Sprint?
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On Feb 29, 2008 @ 6:00 pm, boomboom Said:
Kanebb, what are you talking about?
T-Mobile is rated as one of the top Cell Phone companies in the US, Take a look at Consumer reports, Sprint was rated as the worst cell phone company in terms of Service, Customer Service, plans…ect. While T-Mobile and Verizon were basically tied. (Altell in 3 markets they have were at the top as well)
On Feb 29, 2008 @ 2:13 pm, kanebb Said:
The posters on this thread are coming out swingin lol as a sprint customer I’m ride this thing out t-mobile is the worst carrier of them all everyone I know with them has problems at&t don’t have insurance for there high end phones and verizon cripples most of there phone features
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On Mar 1, 2008 @ 2:14 am, edward Said:
who cares what consumer reports say they can also say daewoo made great cars but when you get in one its crap im talking off of experiance of MYSELF and people i know
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On Mar 1, 2008 @ 11:10 am, backbeat Said:
10 Years after Sprint finally (and mercifully) folds its puptent, the Sprint-trolls will *still* be the biggest loudmouth-whiners on the http://www. The perfect analogy is that they are the Radio Shack geeks of the real technology world. Poor thangs.
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On Mar 2, 2008 @ 12:52 am, dishe Said:
I’ve hated sprint for years, been with ever other carrier over the last decade or so. Finally decided to give one of their SERO plans a try since I was frustrated with T-mobile’s lack of 3G.
I’ve got to say they’ve come a long way.
I didn’t port my number at first because I was wary of how Sprint deals with its customers, but I am actually pleasantly suprised.
Sprint now isn’t what it was even half a year ago. The started offering pro-rated ETF’s, added countless new call centers over the last few months(I get a technical support rep in 2 rings, just as fast as it was with my T-mobile days), blazing fast EVDO coverage in places other carriers don’t have 3G, and when I don’t have service, they have a free roaming agreement with VZW. They’re also the first to get many of the latest hot smartphones (HTC Mogul and Touch).
Wow. I hated sprint before, so I don’t blame people for flaming, but I’m slowly becoming one of those Sprint-trolls. Anyone who bashes sprint should really take a long hard look at what they’ve become, and think about what is actually any better about their current provider. Remember, look at what sprint is *currently*, not where they were a year ago.
As far as this financial thing, I disagree with Joshua. Sprint is turning itself around, that will lose money in the short run, but will hopefully increase sales with their new reputation in the long run. With all the MVNO’s based off of them, the WiMax plans, the talks with Google about future endeavors including the Android platform… It will be a cold day in hell before we see the last of Sprint. Sorry guys.
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On Mar 2, 2008 @ 1:19 am, VCI_Cell Said:
Gosh, backbeat. “When” that happens, thank goodness we’ll still have loudmouth counter-whiners like yourself to bring the “poor thangs’” misdeeds to the public attention.
Back on-topic: Sprint keeps saying their cash situation is still in good enough shape to avoid a takeover attempt, etc. But with the current and projected subscriber loss rate … at what point does the company simply lose so much money that they’re no longer capable of survival?
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