Sprint Nextel Corporation (S) Eased Its Short-Term Debt Load

Sprint Nextel Corporation (NYSE:S) had been struggling along in the wireless industry, fighting to be the No. 2 carrier behind Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) – losing market share to those two companies, and facing mountains of debt. But in recent months, as the company has shifted its strategy and streamlined its operations, it has managed to pare down some of that debt and has paid off some obligations to the point that it has bought itself a few months before having to make another payment. Fortunes again seem to be turning for the company, and it has not been lost on rating firm Moody’s.

Sprint Nextel Corporation (NYSE:S) has recently paid off $1.5 billion in debt ahead of schedule, which included nearly $500 million in bonds that were due to mature in May 2013. Because of that aggressiveness, Sprint Nextel now reportedly has $5.8 billion in cash and cash equivalents on hand, up from $5.2 billion at the same point a year ago. And because of the early payments on the recent debts, the next debt obligation payment of $300 million isn’t due until May. By May of 2014, Sprint will have another $1.4 billion in debt coming due, with $1.6 billion due the following year. At the end of the second quarter, Sprint Nextel Corporation (NYYSE:S) reportedly had $21 billion in debt obligations on the books.

Despite that, Moody’s has recently given a positive note for Sprint Nextel Corporation (NYSE:S), which stated that the company seems to have sufficient cash on hand to fund operations for the next year. “Margins have held up surprisingly well, cash generation is stronger than expected and the customer experience continues to improve,” Dennis Saputo of Moody’s said in an August 9 statement about the company. “However, the road ahead is far from clear and we believe that ongoing progress remains fragile.”

However, progress has been the name of the game for Sprint Nextel Corporation (NYSE:S), and its stock has reflected that in recent months, which has played well for investors like hedge-fund manager David Einhorn of Greenlight Capital.