Sprint Swings To 1Q Loss On Severance Costs
Published on: 1st May 2007
Note -- this news article is more than a year old.
Sprint Nextel swung to a first quarter net loss on severance related costs as it continued to lose high margin subscribers and slip further behind its competition.
The Reston, Va., communications company reported a net loss of $211 million, or 7 cents a share, compared with year-earlier net income of $419 million, or 14 cents a share. The prior-year results included 9 cents in earnings from discontinued operations.
Excluding items, Sprint Nextel said earnings from continuing operations fell to 18 cents a share from 26 cents.
Revenue increased 0.2% to $10.1 billion.
The mean estimates of analysts surveyed by Thomson Financial were for earnings of 22 cents a share on revenue of $10.31 billion.
Sprint Nextel lost 220,000 post-paid subscribers, or contract customers seen in the industry as a source of high-margin revenue. The company had total subscribership rise 600,000 during the quarter to 53.7 million. By comparison, larger rivals AT&T Corp. and Verizon Wireless added 1.2 million and 1.7 million net subscribers, respectively.
Average revenue per post-paid user fell 5% from a year earlier to slightly more than $59, as lower voice revenue was partially offset by higher data revenue from higher demand for text messaging.
The rate of turnover for post-paid customers was 2.3%, flat with the fourth quarter, while pre-paid churn rose to 7%.
Total wireless revenue increased 2% to $8.72 million while adjusted operating earnings slumped 45%. Wireline revenue fell 4% to $1.6 billion as earnings fell 33%.
Sprint Nextel reiterated its forecast for 2007 revenue of $41 billion to $42 billion.
-Kevin Kingsbury and Josee Rose; Dow Jones Newswires; 201-938-5963
(END) Dow Jones Newswires"