NEW YORK (AP) — Sprint Nextel Corp., the third-largest wireless carrier in the U.S., reports its second-quarter results before the stock market opens Thursday, amid a challenging shutdown of its Nextel network.
WHAT TO WATCH FOR: Sprint's stock has rallied recently, as investors have grown more optimistic that the company can pull through some difficult years ahead. In the earnings report and the following conference call, analysts will be listening for signs that the company can handle the dual challenges of selling the iPhone profitably and shutting down the Nextel network.
Sprint aims to complete the shutdown of the aging Nextel network next year, and it's trying to coax the departing subscribers to sign up for Sprint devices instead. If it doesn't, it will come out of the transition as a much diminished company.
In the first quarter, it converted 46 percent of those cancelling Nextel to Sprint service, and analysts want to see it maintain or beat that level.
Citigroup's Michael Rollins expects Sprint to report losing 550,000 Nextel subscribers and gain a net 350,000 Sprint subscribers, all on contract-based plans, which are the most lucrative.
Sprint started selling the iPhone last year. It has helped the company retain customers, but they're expensive for the carrier, which has to subsidize them by hundreds of dollars to sell them for $99 or $199.
WHY IT MATTERS: Sprint has 56 million wireless subscribers, and its struggle to keep them affects other carriers' pricing.
WHAT'S EXPECTED: Analysts surveyed by FactSet expect Sprint to report a loss of 41 cents per share on revenue of $8.72 billion.
LAST YEAR'S QUARTER: Sprint reported a loss of $847 million, or 28 cents per share, on revenue of $8.3 billion.