Sprint Jumps as Earnings Date Change Calms Investor Concerns

  • `We don’t see any near-term liquidity issues,' analyst says
  • Company moves quarterly financial report up a week to Jan. 26

Sprint Corp. climbed the most in 2 1/2 years Friday after moving up the date it will report earnings, assuaging investors’ concerns about a turnaround that had sent its stock and bonds to multiyear lows this week.

The fourth-largest U.S. wireless carrier scheduled its earnings release for Jan. 26, a week earlier than originally planned. The report is expected to show Sprint closed 2015 with its first full year of subscriber gains in eight years.

Sprint shares climbed 15 percent to $2.87 at the close in New York, their biggest jump since July 2013. The stock has lost 21 percent this year. The company’s $4.25 billion of 7.875 percent notes due in 2023 advanced 3.2 cents to 65.45 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. 

Sprint is slowly improving; possibly not quickly enough to get out of the way of the balance sheet but we don’t see any near-term liquidity issues,” Phil Cusick, an analyst with JPMorgan Chase & Co., wrote in a note Friday. He has a neutral rating on the shares.

While Overland Park, Kansas-based Sprint has added subscribers in the past few quarters using promotions, it has also burned through about half its cash and equivalents. The company had a little more than $2 billion of cash and short-term investments on its books at the end of September, which is about equal to the debt maturing it has to refinance in 2016, a year that so far has been tough for bond issuers.

The carrier is aiming to cut $2 billion to $2.5 billion in costs, though analysts have expressed skepticism that the plan will work.

Morgan Stanley credit analyst David Hamburger in a note Wednesday said Sprint has no clear path to a turnaround that could lead to realizing the full value of its bonds or to recover that value in a restructuring or bankruptcy.

“We want to hear from them -- because the story is not that bad,” said Jennifer Fritzsche, an analyst with Wells Fargo Securities LLC, in a note Thursday. Fritzsche is one of three analysts following Sprint with a buy rating on the stock.

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