Moody's Investors Service struck a critical blow to Sprint Nextel on friday. The credit rating company downgraded Sprints credit rating from a Ba1 down to a Ba2 with a negative outlook. A negative outlook indicates that Sprint is in danger of recieving another credit cut within the next 18 months.
"The downgrade of Sprint Nextel's rating reflects the company's continuing challenges in stabilizing its postpaid wireless operations, despite recognized improvements in customer service, amid intense competition and slowing industry growth," Moody's analyst Dennis Saputo said in a release announcing the downgrade.
The cut stems from concerns over Sprints ability to maintain market share. Both Verizon and At&t have seen growth in subscriber numbers this year, whil Sprint still can not get their customers to stop jumping ship. Moody did take note of Sprint liquid position, and their ability to generate free cash flow. Both of which are counted in Sprints corner as a positive. Sprint posted a net loss of $478 Million in the third quarter. The wireless company is considering cutting between 2,000 and 2,500 jobs. The cut in jobs is expected to save Sprint $350 Million annually.
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