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Sprint Corporation Message Board

  • lawstuff22 lawstuff22 Feb 11, 2011 10:37 AM Flag

    Morgan Stanley view on S today.

    S.N, Sprint Nextel Corporation ($4.60) /Approaching Opex Pressures Likely
    Push Consensus EBITDA Estimates Lower, Philip.Nanney
    After management’s disclosure around wireline EBITDA declines and Network Vision related
    opex, we believe consensus EBITDA estimates are too high. If we assume an incremental $400m
    in Network Vision related opex and $200m of lost wireline VoIP EBITDA in 2012, Sprint would
    need to offset $600m to grow consolidated EBITDA. Current consensus calls for a $125m Y/Y
    increase in 2012 EBITDA, which seems difficult to us. We gained little new insight into Sprint’s 4G
    plans, though management said it would describe its strategy by mid-year. Network Vision gives
    the carrier flexibility around Clearwire and other 4G strategies, but any change is unlikely to
    impact results near-term. In the mean time AT&T and Verizon will both offer 4G LTE by mid-year,
    posing challenges to continued postpaid adds momentum, in our view.
    Rating: Underweight
    Telecom Services: In-Line
    Target: $3.00
    52-Week Range: $5.31-3.10
    Mkt. Cap(mm): $13,754
    ModelWare EPS: $(1.16) (FY 12/'10),
    $(1.14) (FY 12/'11)

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