Despite Softbank, Sprint posts wider loss as Nextel drags
Sprint, the No. 3 U.S. mobile service provider, posted a wider quarterly loss due to hefty costs from shutting down its older Nextel network, although revenue grew as its customers spent more on wireless services.
Sprint, which sold 78 percent of its shares to Japan's SoftBank Corp in the quarter, on Tuesday reported a second-quarter net loss of $1.6 billion, or 53 cents per share, compared with a loss of $1.4 billion, or 46 cents per share, in the year-ago quarter.
Revenue rose to $8.87 billion from $8.84 billion over the same period. On average Wall Street analysts had expected revenue closer to $8.7 billion, according to Thomson Reuters.
The company said its average revenue per subscriber on the Sprint network increased to $64.20 in the quarter from $63.38 in the year-ago quarter as its customers spent more on wireless data services such as mobile web surfing.
Sprint lost 1.045 million contract customers in the quarter, more than the average estimate for a loss of almost 972,000 by four analysts contacted by Reuters. Their estimates ranged from a loss of 885,000 to 1.1 million customers.
The company said its Sprint-branded service added 194,000 customers in the quarter, but it would have posted a net decline without 364,000 users transferred from the Nextel network, which Sprint bought in 2005 in a disastrous acquisition and finally shut down in the second quarter.
Sprint has focused its marketing efforts largely on attracting Nextel customers in recent quarters rather than targeting the broader market.
In comparison Sprint's biggest rival Verizon Wireless reported 941,000 subscriber additions and No. 2 U.S. mobile provider AT&T Inc added over 550,000 net new subscribers in the second quarter.
While Sprint has struggled for years to compete with its bigger rivals, analysts now expect the company to become a much stronger competitor with the help of SoftBank Chief Executive and founder Masayoshi Son.
SoftBank paid $21.6 billion to take control of Sprint on July 10 after months of battling with rival bidder Dish Network Corp. SoftBank already helped Sprint - previously the majority owner of Clearwire Corp - to take full control of that company in order to gain access to Clearwire's vast trove of wireless spectrum to beef up Sprint's network.
Sprint said it expects 2013 adjusted operating income before depreciation and amortization (OIBDA) between 5.1 billion to $5.3 billion, including non-cash one-time costs related to its SoftBank deal and its July buyout of Clearwire.
Excluding costs related to the deals, Sprint said its 2013 target was for adjusted OIBDA between $5.5 billion and $5.7 billion, which is ahead of its previous forecast that it would reach the high end of a $5.2 billion to $5.5 billion range.
Sprint, which is working on a network upgrade aimed at catching up with its bigger rivals, said it would have a 2013 capital spending budget of about $8 billion, in line with previous forecasts around the time of the SoftBank deal.
After the results, Sprint's stock rose by more than a percent in pre-market trading. (Click here to get the latest quote.)