Sprint Posts Q2 2012 'Earnings'

Sprint has posted their Q2 2012 results and boy was it quite the bucket of information to get through. There's lots of numbers and some tricky accounting involved, but here are the main points:

• Net loss of $1.4 billion, which calculates out to $0.46 per share.
• Wireless service revenues of $7.3 billion for the quarter, up 8-percent year-over-year.
• ARPU (Average Revenue Per User) growth of $4.31, the highest on record for the U.S. wireless industry.
• Net postpaid customer additions of 442,000, with a best ever churn performance of 1.69-percent.

Now, let's talk about what those numbers actually mean. If you read into the press release, Sprint CEO Dan Hesse made the following statement:

The Sprint platform achieved best ever postpaid ARPU and customer churn that, combined with disciplined customer acquisition and cost management, contributed to our Adjusted OIBDA of $1.45 billion. Based on this performance, we are raising the 2012 Adjusted OIBDA forecast to between $4.5 billion and $4.6 billion.

That's a lot of fancy mumbo-jumbo to all of the non-financial types, but we can break it down a little bit. OIBDA means Operating Income (or loss) Before Depreciation and Amortization. Some more financial speak, we know, but bare with us. In basic terms, the OIBDA numbers don't include a lot of the required accounting, depreciation and expected future losses. This is the big reason why Hesse is quick to point out these OIBDA income numbers. They simply -- well, maybe not so simply -- paint a much nicer picture of Sprint's financials. Between Sprint's "Network Vision" and Clearwire investment alone, they have written-down $986 million in losses for Q2. OIBDA numbers, strategically, don't consider these losses because they do not actually influence Sprint's cash flow or bottom line this quarter. Sprint will be quick to point out that even though they technically lost $1.4 billion in Q2, in terms of cash flow and buying power for future capital expenditures and spectrum acquisitions, they're doing quite well financially.

Whatever the accounting technique, its hard to ignore the big red numbers coming through in Sprint's financial statements every quarter. Let's hope that their expanding LTE network and devices can bring them back into the black sooner rather than later.

Source: Sprint Newsroom

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