Analysis of Sprint Nextel Essay

bolt Nextel Corporation is principally a holding company operating principally through 2 divisions Wireline and Wireless. Incorporated in 1938, bolt is a communications company fling a range of wireless and wireline communications products and operate that are knowing and marketed to individual consumers, businesses, government subscribers and resellers. Its operations are organized to meet the needs of its targeted subscriber groups through focused communications solutions that incorporate the capabilities of its wireless and wireline run.Its wait ons are provided through its ownership of extensive wireless networks, an all-digital global coursen distance network. The Company bump offers wireless and wireline voice and data transmission services to subscribers in all 50 states, Puerto Rico, and the United States Virgin Islands under the hyphen corporate brand, which includes its retail brands of sprint, Nextel, Boost Mobile, Virgin Mobile, and Assurance Wireless on net works that utilize third generation (3G) code division multiple chafe (CDMA), integrated Digital Enhanced Network (iDEN), or Internet protocol (IP) technologies.The Company also offers fourth generation (4G) services utilizing Worldwide Interoperability for microwave Access (WiMAX) technology through its mobile virtual network promoter (MVNO) wholesale relationship with Clearwire Corporation and its subsidiary Clearwire communications LLC (together Clearwire) and, in October 2011, it proclaimed its focus to deploy Long Term Evolution (LTE) technology as part of its network modernization plan, Network Vision. style Nextels home plate are located in Overland Park, Kansas, United States. Dan Hesse is the President and C. E. O.Sprint is a tier 1 global Internet access service provider.Sprint Nextel is the United States third largest long distance provider by subscribers. In 2006, the Sprint Nextel exited the local landline telephone business, spinning those assets off into a newl y created company named Embarq, which CenturyTel acquired in 2008. Sprint owns a 47. 1% interest in Clearwire Corporation and also an 18% interest in NII Holdings, which operates under the Nextel brand in Argentina, Brazil, Chile, Mexico and Peru. Sprint Nextel was the first to offer a consumer available 4G phone, the HTC Evo 4G, in the United States on June 4, 2010.Prior to 2005, the company was know as Sprint Corporation. The company took its current name, Sprint Nextel Corporation, when it merged with Nextel Communications that year. Financial Performance for Periods 2008-2010 Over the three years under review, Sprint Nextel Corp. has revenue has dropped from $35. 6B in 2008 to $32. 2B in 2009, with a modest increase to 32. 5B in 2010. But overall Sprint revenue has been fairly consistent. Gross gather margin has also been on a downward kink year over year 2008 53%, 49% and 46%. Despite this trend Sprint has been performing better than the industry benchmark of 41%.EBITDA/ oper ational Income Margin has been consistently negative from -2. 44% in 2008 to -3. 15% in 2009, and -1. 63% in 2010. While this statistic is rattling worrisome, the company has been able to curve selling, general and administrative costs over the three years from $11. 355B in 2008, to $9. 438B in 2009, to $9. 438B in 2010. Though this cost reduction imitative is very encouraging, Net Losses feel been going in the wrong direction, change magnitude from-$2. 796B in 2008, to -$2. 436B, and -$3. 465B. Sprints debt ratio has hovered between 65% in 2008 to 71% in 2010.The companys creditors would be concerned that on that point is not a greater cushion against losses in the burden of liquidation, airholders on the other hand would want more than than leverage because it magnifies anticipate earnings. Stockholders would be very concerned on the companys revert on common equity which are -14. 03% in 2008, -13. 46% in 2009, and -23. 82% in 2010. From a cash perspective, Sprint has b een managing it cash resources comparatively well. There have been massive investments over this period more or less of which have capital expenditure ($3. 8B in 2008, $1. B in 2009, and $1. 9B in 2010).These investments in capital expenditure, highlights the firms serious emphasis on ripening its product base, and improving the functionality and seamless integration of its technology. Stock Performance for Periods 2008-2010 Sprints carnation set at the close of market in 2010 was $3. 77 which represents a 79. 31% drop from the period high price of $10. 53 at January 02 2008. The companys stock price has reflected its try financial performance. The stock current 52 week range has been $2. 10-$4. 60, and of import of 1. 09.The stock beta measures the excitableness of the security in relation to the volatility of the benchmark market indice (which in this case is the overall financial market) that the stock is being compared to. Beta measures the part of the assets statistical part that cannot be re take to the woodsd by the diversification provided by the portfolio of many uncollectible assets, because of the correlation of its returns with the returns of the other assets that are in the portfolio. Sprints stock Beta estimate Beta is calculated using regression analysis. A beta of 1 indicates that the securitys price leave behind move with the market.A beta of less than 1 means that the security will be less volatile than the market. Sprints beta of greater than 1 indicates that the securitys price will be more volatile than the market by 9%. However three of Sprints major competitors have signficantly better beta estimates AT&T 0. 58, Verizon 0. 51 & Duetsche Telekom 0. 71 (Average Industry Beta 0. 60). When measured against the Industry, Sprints stock has more volatility and is more susceptible market forces. Conversely, most high-tech Nasdaq-based stocks have a beta of greater than 1, offering the porta of a higher rate of return, but also posing more risk.