All eyes on CEO Claure's vision ahead of Sprint's Q3 earnings

Sprint (NYSE: S) is expected to report weak subscriber results for the third quarter, according to estimates from financial analysts, but an even bigger spotlight will be on new CEO Marcelo Claure's vision for reviving the company's results and boosting its network performance.

When Sprint reports earnings after the market closes today, Claure will lead the carrier's quarterly earnings call for the first time. Investors and analysts are looking for more details on how the new chief will continue to improve the business a little more than a year after Japanese parent SoftBank bought a controlling share of the carrier.

Since Claure took the helm from Dan Hesse Aug. 11, he has cut prices, introduced shared data plans that offer double the data allotments of similar plans from Verizon Wireless (NYSE: VZ) and AT&T Mobility (NYSE: T), and also slashed jobs, with the promise of more cuts to come. Last week Sprint announced the appointment of SoftBank executive Junichi Miyakawa as its new network chief, perhaps with the aim of speeding up the deployment of its tri-band Spark LTE service.

"This is his stepping out," Jackdaw Research analyst Jan Dawson told the Kansas City Star of Claure. "We'll learn a lot about his personal style and how it differs from Dan Hesse's."

It's not entirely clear how Sprint's new tactics will turn out in terms of third-quarter results. Sprint's three Tier 1 competitors added around 5.87 million total net subscribers in the third quarter, including 3.68 million total postpaid net adds. "With so much of the industry having reported solid subscriber gains it is difficult to see how Sprint will be capable of halting the erosion of its customer base," noted Canaccord Genuity analysts Greg Miller and Matthew Kahn in an Oct. 30 research note.

"We believe Sprint continued to see pressure on subscriber metrics through the first two months of the quarter, but saw an improvement in September owing to pricing changes," Credit Suisse analysts Joseph Mastrogiovanni and Michael Baresich wrote in an Oct. 30 research note. "As such, we're reducing our fiscal 2Q14 (calendar 3Q14) net add estimate to a loss of 100k from a gain of 100k."

The Credit Suisse analysts think that Sprint has brighter days ahead though. "We believe Sprint would have reached positive subscriber adds with or without a change in management and strategy," they wrote. "With the new changes, Sprint may be able to maintain or accelerate subscriber growth vs. our prior expectations. We think investors will view the first quarter that Sprint goes positive as an inflection point for subscriber growth, but…while we expect net adds to remain positive, subscriber growth could remain volatile."

However, the Canaccord Genuity analysts expect Sprint's operating trends for the third quarter to be "lackluster," according to a recent research note.

"Although the company has come a long way from the days of operating incompatible parallel networks and has very slowly modernized its network to a common standard, we suspect the transition effect of sub-par execution will continue to plague reported results," they wrote. "With the fourth management team having taken over the company since we have been covering the stock, we look for a materially different outcome but will await the details of an operational plan before evaluating the probability of witnessing the long awaited turnaround."

Something that may also come up during Sprint's earnings call with investors today is its recent job cuts. The company announced 452 job cuts from its Overland Park, Kan., headquarters in October, and said more would come. Some of those employees had worked on the carrier's Network Vision network modernization project, which wrapped up around the middle of the year. The company also said it cut 235 jobs at its offices in Reston, Va.

Sprint already cut a net total of 5,000 jobs from January through mid-September, bringing the company down to 33,000 employees before the latest cuts. The carrier is still evaluating it business and has not settled on a final number of job cuts; additionally, the company is still hiring in some areas of its business.

For more:
- see this Kansas City Star article
- see this Channel Partners post

Related Articles:
T-Mobile's Legere: If customers try Sprint and don't like it, they'll leave and never come back
Sprint names SoftBank executive Miyakawa as its new network chief
Sprint slashes another 452 jobs at company headquarters, more to come
Analysts: Verizon likely to lead in Q3 subscriber additions while Sprint struggles to regain momentum
Sprint tweaks 2.5 GHz LTE deployment strategy to target congested parts of network
Sprint's Claure: T-Mobile should step aside, we are the new industry disrupters

Correction, Nov. 3, 2014: This article incorrectly stated that it has been a little more than two years since SoftBank completed it purchase of a controlling interest in Sprint; the deal closed a little more than one year ago.