Can Sprint Nextel Extend Its Rally?

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E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Sprint Nextel’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Sprint Nextel look like and more importantly, how did the markets like these numbers?

2012 Q4

2012 Q3

2012 Q2

2012 Q1

Earnings Growth (Y-O-Y)

0%

-160%

-64.29%

-93.33%

Revenue Growth (Y-O-Y)

3.24%

5.16%

6.4%

5.06%

Earnings Reaction

-0.51%

-1.77%

20.17%

-1.61%

Sprint Nextel has seen increasing revenue growth but is still working on its earnings growth. From these figures, the markets have been mostly dissatisfied with Sprint Nextel’s last four earnings announcements.

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P = Poor Relative Performance Versus Peers and Sector

How has Sprint Nextel stock done relative to its peers, Verizon (NYSE:VZ), AT&T (NYSE:T), MetroPCS (NYSE:PCS), and sector?

Sprint Nextel

Verizon

AT&T

MetroPCS

Sector

Year-to-Date Return

6.22%

10.48%

6.6%

13.92%

4.26%

Sprint Nextel has trailed most of its peers in year-to-date performance.

Conclusion

Sprint Nextel is competing in a telecommunications industry that is seeing and will continue to see strong signs of growth. The stock has suffered over the years but it is currently seeing a strong bounce from lows. Earnings are still being worked on but revenue has been steadily growing over the last four quarters. Relative to its peers and sector, Sprint Nextel stock has underperformed most of its competitors. WAIT AND SEE what Sprint Nextel does in the coming quarter.

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