Sprint Nextel loss widens in 2Q

By Dow Jones Newswires
Posted July 28, 2010 at 6:25 a.m.

Sprint Nextel Corp.’s second-quarter loss widened as overall subscribership fell and the company booked a $302 million tax-related charge.

Still, shares jumped 5.4 percent in premarket trading to $5.09. As of Tuesday’s close, the stock had risen 32 percent this year.

The third-biggest wireless carrier in the U.S., behind Verizon Wireless and AT&T Inc., lost 228,000 post-paid subscribers and added 173,000 pre-paid customers for the quarter. Sprint’s total customer base, made up of pre-paid and post-paid subscribers, is 48.2 million.

The company has had problems keeping its post-paid customers, as they have left by the millions the last several years. Sprint’s prepaid business has been a bright spot, though, showing continued strong growth. Sprint has pinned its post-paid hopes on the rollout of its 4G network quicker than any other U.S. carrier, and its first device to run on the super-fast network, the Evo 4G, has exceeded supply.

Sprint reported a loss of $760 million, or 25 cents a share, from a year-earlier loss of $384 million, or 13 cents a share. The most-recent quarter included a 10-cent charge related to the increase in valuation allowance on deferred tax assets.

Revenue fell 1.4 percent, to $8.03 billion.

Analysts polled by Thomson Reuters had most recently forecast a loss of 20 cents, on $8.03 billion in revenue. Some analysts had backed out the tax charge from their expectations while others didn’t.

The company said its churn, or the percentage of customers who cancel service, was a best-ever 1.85 percent in its post-paid business and 5.61 percent in its prepaid business, down from 2.05 percent and 6.38 percent, respectively, a year earlier.

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One comment:

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