Sprint Corp. (NYSE: S) reported its fiscal fourth-quarter financial results before the markets opened on Tuesday. Despite a reported loss, it doesn’t appear that investors truly have made up their minds on the stock. However, one key analyst sees Sprint dipping even lower ahead. Merrill Lynch reiterated an Underperform rating with a $2.60 price objective.

Sprint said consolidated revenue totaled $8.07 billion, which was 1.1% below Merrill Lynch’s estimate of $8.16 billion and 0.6% above Wall Street’s consensus of $8.05 billion. Total service revenue totaled $6.15 billion and was 0.5% short of the firm’s $6.18 billion estimate and 0.6% below the consensus of $6.19 billion.

Post-paid net additions were 56,000, below Merrill Lynch’s 226,000 forecast and the consensus of 220,000. Sprint attributed the weakness to tablet net losses, which has been a theme across the industry as customers disconnect tablets, which were added as part of earlier promotions. Post-paid phone net additions of 22,000 were similarly below consensus of 118,000. Post-paid ARPU of $59.54 missed the firm’s $61.67 estimate.

During the quarter, Sprint lost 264,000 prepaid subscribers. Subscriber upgrades rate fell to 5.9% from 9.3% in the prior period and 7.5% in fiscal fourth-quarter of 2014. Carriers have attributed lower upgrade rates to the lack of new devices and fewer promotional offers.

In terms of guidance, the company expects operating income of $1 billion to $1.5 billion, cash capital expenditures of $3 billion (versus Merrill Lynch estimates of $5.7 billion in capex), and adjusted free cash flow (FCF) is expected to be around breakeven.

Merill Lynch expects investors to focus on the company’s adjusted FCF guidance. It is unclear to the firm to what degree Sprint’s fiscal 2016 FCF guidance includes net proceeds from sale-leaseback of devices and sales of future lease receivables, which the company includes in its adjusted FCF calculation.

Shares of Sprint were trading up 4% at $3.63 Tuesday morning, with a consensus analyst price target of $7.28 and a 52-week trading range of $2.18 to $5.29.

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