OVERLAND PARK, Kan. (
) -- Shares of
rose sharply in early trading on Monday after UBS predicted an imminent return to wireless revenue growth.
Sprint's shares rose 15 cents, or 3.38%, to $4.59 after the UBS report, which advised investors to become short-term buyers of the stock ahead of the company's third-quarter results next month.
is growing its postpaid subscriber base after losing 10 million subscribers over the last four years, according to UBS analyst John Hodulik. "We now expect postpaid net adds of 50,000 in the third quarter versus our previous estimate for net losses of 150,000," he wrote.
Sprint last registered wireless revenue growth three years ago, although Hodulik says that the company has now reached a major milestone in its turnaround, with wireless momentum continuing into 2011. Long term, however, the analyst maintains his neutral rating on Sprint shares given his belief that the service provider will eventually consolidate 4G partner
With a 54% stake in Clearwire, it could be a logical step for Sprint to swallow the networking specialist, although Hodulik does not expect this to happen within the next four months.
Sprint, which faces competition from
, launched its
first 4G network in Baltimore in September 2008
and is working closely with Clearwire to bolster its 4G coverage. The telco expects its 4G service to cover up to 120 million people by the end of 2010.
Analysts surveyed by Thomson Reuters expect Sprint to generate third-quarter revenue of $8.02 billion and report a loss of 27 cents a share.
--Written by James Rogers in New York.
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