Sprint Nextel (S ) says on the conference call that the reason for the churn was lack of iPhone. Sprint further adds that iPhone will be huge for cash flow and will be very profitable.
Sprint stock has moved up on these predictions.
We agree that iPhone will reduce churn. However it is difficult to see Sprint taking any market share away from AT&T (T) and Verizon (VZ).
There are also reports that Sprint has made a $20 billion commitment to Apple (AAPL). There are no details, so it is difficult to analyse the impact of this commitment on profitability.
We do not recommend buying Sprint on this run up, but will be evaluating on any pull back.
If and when six screens of the ZYX Change Method are satisfied, we will issue a buy signal on the Real Time Feed of the ZYX Buy Change Alert.
