Sprint’s Third-Quarter: Not a Race to the Top
Don’t call it a comeback…yet, Sprint Corporation (NYSE: S) reported third-quarter results before the markets opened on October 30, and marked the 13th consecutive quarter of wireless service growth. The third-quarter brought in a net income of $383 million, and Adjusted EBITDA $1.34 billion, 5 percent higher than third-quarter 2012. A one-time, non-cash $1.4 billion gain came from the write-up of Sprint’s previously held investment in Clearwater.
Strong results were driven by new customers and smartphone sales. Sprint sold 5 million smartphones in the quarter according to the report, and 40 percent went to new customers. Of the 5 million smartphones, 1.4 million were iPhones. New data plans were also launched this quarter including Unlimited, My Way, and All-In, as well as the ability to upgrade plans for existing customers.
Sprint continued the expansion of its 4G LTE network. Dan Hesse, Sprint’s CEO said in the statement that the company made “great strides in our 4G LTE rollout,” adding, “[w]e expect our network investments will bring customers greater speeds and capacity and, when combined with our unique unlimited for life offers, will improve our competitive positioning.”
But Sprint incurred some heavy losses as well, particularly from Clearwater and Softbank transactions, which included severance costs and exit fees. Operational losses for the quarter were $398 million, compared to operational losses of $231 million in 2012 when Sprint closed its Nextel platform. The company also lost 360,000 postpaid subscribers. It did gain 84,000 prepaid subscribers and 181,000 wholesale and affiliate subscribers.
Sprint maintained its forecast for 2013 Adjusted EBITDA to be between $5.1 billion and $5.3. Early morning trading for the company was up by as much as 27 cents per share from yesterday’s close of $6.68 per share.