Earnings Preview: Sprint to report 1Q results

Earnings Preview: Sprint Nextel to report first-quarter results as it's torn between 2 buyers

Associated Press

NEW YORK (AP) -- Sprint Nextel Corp., the third-largest wireless carrier in the U.S., reports its first-quarter results before the stock market opens Wednesday. The earnings report comes as Sprint studies an unsolicited takeover from Dish Network Corp. that seeks to stave off Sprint's planned sale to Softbank Corp. of Japan.

WHAT TO WATCH FOR: Sprint's quarterly results will be overshadowed in investor's minds by the merger machinations.

Last week, Dish, the second-largest U.S. satellite TV company, offered $25.5 billion for Sprint in cash and stock, saying this trumps Softbank's offer of $20.1 billion for 70 percent of Sprint. Sprint agreed to the Softbank offer last year, and the deal was set to close this summer, but Sprint's board is now considering Dish's offer.

Concurrently, Sprint has agreed to buy out the minority shareholders of Clearwire Corp., which operates a mobile broadband network.

Both buyers are betting on a turnaround at Sprint, which has been a money-loser for more than five years, and is expected to post another loss.

As usual, investors will be looking for the net number of new devices signed up on contract-based plans, which are the most lucrative. Sprint has been stemming loses there in recent years through better customer service, but losses sped up again last year as Sprint started shutting down the aging Nextel network. For the latest quarter, analysts expect a loss of about 450,000 devices, which would be more than twice last year's loss.

WHY IT MATTERS: Sprint has 55.6 million devices on its network, and its future will take different paths depending on whether it's bought by a satellite TV company or an overseas investor.

WHAT'S EXPECTED: Analysts surveyed by FactSet expect Sprint to report a loss of 32 cents per share on revenue of $8.73 billion.

LAST YEAR'S QUARTER: Sprint reported a loss of $863 million, or 29 cents per share, on revenue of $8.7 billion.

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