Sprint Nextel (NYSE:S) reported a quarterly loss on Wednesday that was narrower than many on Wall Street expected. The company saved money as its wireless operating income was boosted by weaker-than-expected subscriber numbers.
It has been no secret that the wireless operator has been struggling with subscriber losses and costs deriving from a network upgrade project and subsidies for smartphones, including Apple’s (NASDAQ:AAPL) iPhone. The company announced that while its Sprint network added 263,000 net subscribers in the quarter, it lost 455,000 customers on its Nextel iDen network. Sprint plans to shut down the network. According to these figures, the net losses total to 192,000 subscribers, worse than analyst estimates ranging from a loss 150,000 to a gain of 33,000, according to Thomson Reuters.
According to Roe Equity Research analysts, Sprint reduced costs in areas such as subsidies because the number of new Sprint customers was weaker than analysts expected. Sprint’s adjusted wireless operating income before depreciation and amortization of $1.05 billion beat Roe’s expectation for $860 million.
The firm stated that Sprint saved money as it grew slower, with fewer new subscriber-related costs. However, this is no victory for the company since Sprint’s wireless growth underperformed, making it a disappointing blow for long-term prospects. Meanwhile, rivals Verizon Wireless (NYSE:VZ) and AT&T (NYSE:T) had net subscriber additions in the quarter.
Sprint posted a loss of $863 million, or 29 cents per share, compared with a loss of $439 million, or 15 cents per share ,in the year-ago quarter. According to Thomson Reuters I/B/E/S, revenue was in line with Wall Street estimates of $8.7 billion, rising 5 percent to $8.7 billion, from $8.3 billion a year earlier.
Sprint announced that it expects 2012 adjusted OIBDA to be at the high end of its previously announced forecast of between $3.7 billion and $3.9 billion. The wireless operator forecast full-year net service revenue growth of 4 percent to 6 percent. Sprint added that full-year capital expenditures would be about $6 billion.
Sprint shares rose 9 percent to $2.70 in premarket trading after closing at $2.47 on Tuesday on the New York Stock Exchange.