The Country Caller discusses the key areas of the upcoming release that will be of importance to investors

Published By: Ken Bock on January 30, 2017 11:23 am EST

Telecommunications giant Sprint Corp (NYSE:S) is due to release financial results for Q3FY16 before markets open tomorrow, with negative sentiments persisting as losses are awaited. The Overland Park-based company is expected to report a top line of $8 billion, while the loss per share estimate is 13 cents. One of the noticeable things is that the $35.89 billion company has managed to report lower than expected losses in the last three instances. The Country Caller discusses the key areas of the upcoming release that will be of importance to investors.

As the company reported last quarter, Sprint's performance has been on the verge of improvement, as it recorded best ever net postpaid additions and also recorded impressive increase in its top line numbers. This time too, investors would be eager to know the key metrics so as to ascertain if the company is on track.

Sprint has been reliant on debt as a source of funds, as is implied by its debt to equity ratio of 1.88 which suggests the vulnerability of the company. It will be interesting to see whether Sprint has brought in any improvements in its interest coverage ratio, which was only 0.15 in 2016.

Investor concerns prevail ahead of the numbers as TCC witnessed a massive surge in short interest, as per the recent data. Also, the adherence to bearish views by the Street is another depressive factor for Sprint, as a number of sell side firms such as Deutsche Bank and RBC Capital Markets stick to lower price targets. The consensus PT also implies a downside of over 40% from Friday’s close.

While such negative views persist, it seems to be the right opportunity for the company to win investors if it posts better numbers. It will be interesting to see what comes out tomorrow.