How Does Sprint Corporation’s (NYSE:S) Earnings Growth Stack Up Against Industry Performance?
Today I will take a look at Sprint Corporation’s (NYSE:S) most recent earnings update (30 September 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the wireless telcom industry performed. As an investor, I find it beneficial to assess S’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for Sprint
Were S’s earnings stronger than its past performances and the industry?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to analyze various companies in a uniform manner using the most relevant data points. For Sprint, its most recent bottom-line (trailing twelve month) is -$604.0M, which, relative to the previous year’s figure, has become less negative. Since these figures are somewhat myopic, I’ve determined an annualized five-year value for Sprint’s earnings, which stands at -$2,240.2M. This shows that, although net income is negative, it has become less negative over the years.
We can further assess Sprint’s loss by looking at what’s going on in the industry as well as within the company. Firstly, I want to quickly look into the line items. Revenue growth over the past couple of years has been relatively subdued, remaining flat on average at -0.65%. Given that top-line growth is also pretty stale the key to profitability going forward would be managing cost growth rates. Viewing growth from a sector-level, the US wireless telcom industry has been growing its average earnings by double-digit 10.39% in the previous twelve months, . This is a turnaround from a volatile drop of -3.06% in the previous few years. This suggests that, while Sprint is currently loss-making, it may have only just benefited from the recent industry expansion, moving earnings into a more favorable position.
What does this mean?
Sprint’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most valuable step is to assess company-specific issues Sprint may be facing and whether management guidance has consistently been met in the past. You should continue to research Sprint to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for S’s future growth? Take a look at our free research report of analyst consensus for S’s outlook.
2. Financial Health: Is S’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
