While Sprint (S) - Get Report CEO Marcelo Claure touted progress in the wireless carrier's turnaround, shares of the company dropped sharply after the company reported results for the fiscal second quarter on Tuesday.

As Sprint reported that it lost four cents per share in the period, in line with forecasts from FactSet, the stock fell 40 cents, or almost 6%, to $6.51 in the late afternoon. Still, the stock remains closer to its 52-week high of $7.16 than its low over the last year of $2.18.

Claure told investors that the carrier has gained subscribers from AT&T (T) - Get Report and Verizon (VZ) - Get Report , cut $1.1 billion in costs, raised financing on improved terms and boosted liquidity. Still, concerns about the carrier's investment in its network and other factors have weighed on Sprint.

Sprint gained 344,000 net post-paid subscribers who have traditional mobile plans with a monthly bill during the period. "Our postpaid phone net additions were nearly 400,000 more than Verizon this quarter and 700,000 more than AT&T in the quarter," Claure said. "We have now surpassed Verizon and AT&T for three consecutive quarters in postpaid phone net additions."

Like T-Mobile USA (TMUS) - Get Report CEO John Legere a day before, Claure predicted that AT&T's move into movies and television with its planned acquisition of Time Warner (TWX) would distract the company from its wireless business.

Claure also suggested that the merger of a wireless company with a media group has heightened appreciation for Sprint's business. "I would say that our strategic value to many has significantly grown, as we've had a lot of bankers placing more calls than usual over the weekend," he said.

While Sprint gained post-paid accounts, it lost 427,000 net pre-paid subscribers in the period.

The carrier's capital expenditures have been light, raising some concerns about whether it can maintain improvements to its network. The company spent $470 million in capex for its network, well below the $725 million that Barclays analyst Amir Rozwadowski expected.

Claure said that Sprint has invested more than other carriers in the past, and will increase spending in the second half of the year. Still, Sprint lowered its capex forecast for the year from $3 billion to less than $3 billion.

Sprint also said it had $11 billion in liquidity at the close of the quarter. The company recently closed a $3.5 billion financing backed by wireless spectrum licenses that carries an interest rate of 3.36%, which is less than half the rate of its last financing. By comparison, debt from Sprint's 2013 acquisition of Clearwire pays 14.75% interest. "Any time you can replace debt of 14.75% with debt at 3.36%, then definitely this is going to be a credit," Claure said.

Questions will remain about whether Sprint's reduced capex strategy is sound, however, wrote Barclays' Rozwadowski. "That being said, given its recent capital raises, ongoing execution of its cost reduction initiatives and a clear turnaround in its subscriber trajectory, management seems to have clearly moved past the prevailing liquidity concerns plaguing the shares earlier this year," he wrote.

M&A expectations may support Sprint's stock.

Craig Moffett of MoffettNathanson downplayed the likelihood that AT&T's acquisition of Time Warner would prompt Comcast (CMCSA) - Get Report to purchase a wireless carrier. AT&T is buying Time Warner to diversify its business, he observed, as well as to offset its "struggling core business" as T-Mobile USA and Sprint grab mobile share.

"Why in the world would Comcast want to copy a strategy like AT&T's?" Moffett asked, instead suggesting that T-Mobile USA and Sprint could pursue a combination in 2017 with a new administration in the White House.

While the Obama administration stood in the way of a merger of Sprint and T-Mobile USA, a deal could appear plausible under some circumstances. "A horizontal merger between the two would be greeted far more warmly if it were positioned as a lifeline for what would otherwise be a failing firm," Moffett wrote.

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