Sprint's Troubled Quarter
NEW YORK (TheStreet) -- Any reasoned coverage includes sales and earnings compared to expectations, but successful traders must also be mindful of how non-headline numbers compared to expectations.
Unfortunately, the bulk of the media failed to alert anyone on
Sprint's
(S) - Get Report
iPhone
(AAPL) - Get Report
numbers.
Here's the deal: Sprint reported a troubled quarter. While there was excitement about the iPhone's potential impact on the troubled Kansas company's fortunes, they are subsidizing the product to a nearly comical degree, losing money they won't make up anytime soon (if ever) with contract fees.
But there is more trouble afoot: Sprint didn't even sell as many iPhones as expected. While the media reported their sales and earnings set beside expectations, nearly all (and, yes, Barron's, Wall Street Journal and New York Times--I'm talking to you) only noted that Sprint sold 1.8 million iPhones. That's a lot in the aggregate, but as Reuters was right to point out: expectations were for about 2 million. Sprint, we know from reading Reuters, came in light.
At some level, since Sprint is losing money on each iPhone, it's perversely good news that they didn't sell as many iPhones as expected. But that also shows you how the troubled carrier is caught between a rock and a hard place. They are losing money and they can't make it up on a volume. Plus, the volume numbers are light.
All in all, bad news. Sprint is tied in a nasty knot. But you wouldn't have full sense of it without those iPhone expectations numbers.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.
For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.
Fuchs appreciates your feedback;
to send him an email.
