Sprint Excludes iPhone Losses From Bonus Calculations
Sprint Nextel Corp (NYSE:S) said in a filing that it had excluded the cost of the Apple (NASDAQ:AAPL) iPhone, which it sells at a loss, from the bonus calculations for eligible employees for 2011. Payments from LightSquared Inc were also excluded.
These adjustments of the calculation mean that bonuses payable as short-term incentives would be 73.7 percent of target as against 63.7 percent earlier. Similarly long-term incentives bonus would now calculate as 106.5 percent of target against 91.5 percent without the adjustment.
Sprint started selling the iPhone in October in an effort to stop the migration of customers to other networks that offered the hot-selling phone. The company has to subsidize the cost of the phone, making it a loss-making proposition. However, according to Sprint, “The Company believes that the investment it is making in the iPhone will be beneficial to our shareholders in the long- term,” it said in yesterday’s filing.
Here’s how shares of Apple and Sprint are trading:
Apple Inc. (NASDAQ:AAPL): AAPL shares recently traded at $503.37, up $0.77, or 0.15%. They have traded in a 52-week range of $310.50 to $503.83. Volume today was 5,646,979 shares versus a 3-month average volume of 12,470,400 shares. The company’s trailing P/E is 14.32, while trailing earnings are $35.14 per share.
Sprint Nextel Corp. (NYSE:S): S shares recently traded at $2.28, down $0.03, or 1.3%. They have traded in a 52-week range of $2.10 to $6.45. Volume today was 5,472,945 shares versus a 3-month average volume of 38,530,500 shares. The company’s trailing earnings are $-0.84 per share.
To contact the reporter on this story: Lindsey Grossman at firstname.lastname@example.org
To contact the editor responsible for this story: Damien Hoffman at email@example.com