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NII Holdings warns on profit as subscriber losses mount, shares sink

Thursday, 31 Oct 2013 | 10:05 AM ET

Oct 31 (Reuters) - NII Holdings Inc, which provides telecom services under the Nextel brand in Latin America, said it will miss its full-year adjusted operating profit forecast, largely due to subscribers losses and higher investments.

The company's shares fell as much as 21 percent to a more than 10-year low at open on Thursday.

NII said it expects full-year adjusted operating income before depreciation and amortization to come in at least $200 million below its prior forecast of $600 million to $650 million.

The company, which targets business customers in Mexico, Brazil, Argentina and Chile, also said it was modifying its compensation plans to cut costs.

NII reported net subscriber losses of 178,400 during its third quarter ended Sept. 30. The losses were much bigger than the 32,000 estimated by Wells Fargo analyst Jennifer Fritzsche. Macquarie Capital's Kevin Smithen was looking for additions of 3,000.

The company's results were also hit by higher investments in its next-generation networks, lower average revenue per subscriber and customer migration costs in Mexico.

NII's net loss widened to $299.9 million, or $1.74 per share, from $82.4 million, or 48 cents per share, a year earlier.

Operating revenue dropped 22 percent to $1.10 billion.

Analysts on average had expected a loss of $1.17 per share on revenue of $1.23 billion, according to Thomson Reuters I/B/E/S.

The company's shares were down 16 percent at $4.05 on the Nasdaq. They touched a low of $3.80 earlier.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila)

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