Be Smart

If you thought the store closure today was just to prep Sprint employees on the carrier's new $100 Simply Everything plan, think again; there's a fair chance some strong motivational encouragement was going on too, as the company today announced a quarterly loss of $29.45bn thanks to a goodwill write-off, predicted further decline in subscriber numbers, and even froze dividends for "the foreseeable future".  It's news that has sent Sprint's share price into a tailspin, dropping 13-percent to a five-year low, and prompted CEO Dan Hesse to describe the situation as "more difficult than what I expected to find" when he took over in December last year.

With subscriber losses expected to reach a massive 1.2 million this quarter (compared to outsider predictions of around 400,000) and the company bluntly suggesting that there'll be no significant turnaround of that in Q2, analysts have been deeply pessimistic about the carrier: Stanford Group analyst Michael Nelson described the figures as "considerably worse than even the most bearish estimates out there."  Sprint is predicting Q1 operating income at up to $0.7bn less than initial market expectations: $1.8-1.9bn compared to Stifel Nicolaus analyst Chris King's prediction of $2.3bn.

Sprint has confessed to borrowing money from a revolving credit facility - $2.5bn, in fact - and both they and the analysts are doubtful that the Simply Everything plan will be what the company needs to repay that; instead, Hesse believes the carrier's brand is in need of serious attention as it currently "lack[s] relevance and a clear message."