Sprint Nextel (NYSE:S) is poised to deliver stronger financial and subscriber results in the third quarter, according to a UBS analyst , buoying the view that the nation's No. 3 carrier is turning the corner.
UBS analyst John Hodulik upgraded Sprint's stock to a short-term "buy," and said the carrier will deliver positive wireless revenue growth in the upcoming quarter as well as positive postpaid net subscriber additions, which would mark a key milestone for the company. UBS maintained a long-term "neutral" view on Sprint, but said the carrier likely will net 50,000 postpaid subscriber additions in the third quarter and 150,000 net postpaid adds for the fourth quarter--both of which are positive revisions of previous estimates.
Sprint reported its first net wireless subscriber growth in three years in the second quarter. However, the carrier posted a wider net loss and still lost 228,000 postpaid subscribers in the quarter. "I'd say we're turning a corner," Sprint CEO Dan Hesse told FierceWireless in late July. "I don't want to make definitive statement that we've turned the corner."
As for WiMAX carrier Clearwire (NASDAQ:CLWR), UBS said it doesn't think Sprint will consolidate its hold on Clearwire during the company's next funding round; Sprint currently holds a 54 percent stake in Clearwire. Sprint CFO Bob Brust said earlier this month that although Sprint would like to control Clearwire, the carrier does not have the cash to purchase Clearwire outright.
- see this Reuters article
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