Friday, November 4, 2011

Who Is the King of Telecom Stocks — Sprint, AT&T or Verizon?

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tdp2664 InvestorPlace Communication. It really does make the world go round. Of course today, staying connected isn’t just about face-to-face interaction. Now, keeping in touch, conducting business, learning the latest news and a thousand other activities are accomplished through telecommunications. The industry has become a linchpin for modern society. From telephones and television to the Internet and wireless mobility, telecommunications is the driving force behind some of our most routine daily tasks, and since several of the industry’s top players have just reported earnings, now is the perfect time to examine and reevaluate how telecommunication companies are performing in the current market environment. Telecom isn’t simply about providing home and business phone service anymore. The ever evolving wireless revolution has turned the telecommunications field into a cutthroat arena. Expanding technology forces companies to stay sharp and makes the battle to be Number 1 all the more ruthless. A Big Three Throwdown It’s nearly impossible to turn on the TV, read the newspaper or listen to the radio without seeing or hearing an advertisement for the latest cell phone or enhanced Internet service. We are all, to some extent, wrapped up in this mobile age. Everything must be wireless, fit in the palm of your hand and be accessible by a few swipes of your fingertip. If nothing else, telecommunication companies know how to market and make consumers want their services. But is that want translating into profits? Which of the top telecommunications providers is really the best buy for investors? Let’s break down the facts: Sprint The No. 3 wireless carrier in the U.S. right now is Sprint Nextel Corp. (NYSE: S ). It seems that Sprint is constantly trying to play catch-up and erase the distance between it and the top two carriers in the country. In recent quarters, the company has suffered from minimal sales growth and earnings losses. Last week, the company reported earnings that posited some positive results. For the third quarter, the company reported its smallest quarterly loss in over four years. Sprint’s net loss was $0.10 share, while revenue rose 2.2% to $8.3 billion. This was the best performance by the company since its $64 million profit in the third quarter of 2007. The company also managed to improve its subscriber base by adding 1.3 million subscribers in the quarter. Unfortunately, this bit of news hasn’t down much for raising the stock’s outlook in my book. The stock receives particularly poor grades for sales growth, cash flow and analyst revisions, which does not offer much hope for the stock’s upcoming performance.



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