Free Newsletter
Analyst: expect higher Q1 churn at Sprint
Free newsletter via e-mail
Tools
An analyst report saying that Sprint Nextel will have higher churn than expected in the first quarter of 2009 sent the company's stock price plummeting.
Wachovia Capital Markets analyst Jennifer Fritzsche downgraded Sprint to "market perform" from "outperform" because of fears of higher churn. She projected first quarter churn to be between 2.1 and 2.3 percent, above the consensus estimate of 2.16 percent. Sprint's churn in the fourth quarter of 2008 was 2.16 percent, compared to 2.15 percent in the third quarter and 2.29 percent in the year-ago quarter.
Sprint's stock closed on Monday at $3.57, down 57 cents, or 13.8 percent. Fritzche said that Sprint continues to lose subscribers on its iDEN network, many of whom have been affected more adversely by the economic recession than other Sprint customers. The note said that Sprint's current stock price took into account that Sprint had started offering new flat-rate Nextel Direct Connect plans, was cutting costs and its highly anticipated launch of the Palm Pre will occur in the second quarter.
For more:
- see this article
Related Articles:
Report: Sprint, Ericsson sign $2B network outsourcing deal
Sprint Nextel loses 1.3M subs in fourth quarter
Sprint launches flat-rate Nextel Direct Connect plans
Sprint Nextel to cut 8,000 jobs
Sprint may close call centers to cut costs
Sprint may be considering outsourcing jobs
Comments
Posted by Anonymous | March 17, 2009 - 11:15am
Time to to churn the out Sprint's C exec suite and board.
Posted by Allan S. | March 17, 2009 - 12:09pm
The average of Ms. Fritzsche's estimate is 2.2. The consensus estimate is 2.16. If you average the latter to one decimal point, you obtain 2.2.
Where's the analysis? More importantly, where's the data?
Posted by Anonymous | March 17, 2009 - 12:15pm
It's quite simply. Sprint Nexel leads in the business space, primarily with users in the construction vertical that have depended on Push To Talk for years. But with the economy in the shape it is the construction industry has been hit very very hard and therefore many customers have had to disconnect for business downturn. If they were porting out to another carrier it would be bad, but the fact is the majority of iDEN subscriber losses is due to the economy in that sector. Not much Sprint Nextel can do about that really.
Posted by Anonymous | March 17, 2009 - 3:00pm
Sprint stock was going up until Fritzche came along. Makes you wonder about Fritzche.
Posted by Anonymous | March 18, 2009 - 8:00am
I don't understand how one analyst can affect a company's stock so dramatically. Part of the problem with the financial markets today - we've become completely reactionary in our investments. Where's the data? Another silly analyst with no facts but smelling blood in the water. It becomes a self-fulfilling prophecy that a company will struggle when the analysts say they will.
Posted by Anonymous | March 18, 2009 - 9:04pm
MERGER - iGATE HAS HIGHEST BID OF 20 CENTS (USD) FOR EACH SHARE OF SATYAM (SAY).
Comments (7) | Post a comment