Sprint Shares Get Slammed on Cash Worries

Sprint Nextel shares (S: 2.15, -0.56, -20.66%) fell 8% on Monday as analysts slashed their forecasts for the No. 3 U.S. mobile operator, which said last week that would have to raise new capital.

Sprint shares fell 20 cents to $2.21 after analysts cut their price targets for the stock and forecast free cash flow losses. S&P gave Sprint debt a "watch negative" rating.

The company discussed a costly network upgrade plan at a conference on Friday, telling investors that it would need to tap capital markets, even before accounting for big additional costs it expects from subsidizing sales of the new Apple Inc (AAPL: 384.40, +14.60, +3.95%) iPhone.

UBS analyst John Hodulik estimated that Sprint would incur a free cash flow loss of $2.5 billion over the next two years and worried how it would pay for upcoming debts.

Read Full Article from Fox Business

- Posted: 2011-10-10 13:35:39

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