Sprint Nextel Loses Subscribers, Misses Expectations
Sprint Nextel , the third-biggest U.S. mobile phone service, posted a quarterly loss and a fall in subscribers who pay monthly bills, adding to worries that the company was losing market share to rivals.
The company reported a loss of $211 million, or 7 cents a share in the first quarter from a profit of $417 million, or 5 cents a share from continuing operations in the year ago quarter.
It earned 18 cents per share before amortization charges, compared to 26 cents in the year-ago period and lower than an average analyst estimate of 22 cents according to Thomson Financial.
Quarterly revenue rose modestly to $10.1 billion from $10.07 billion in the year ago quarter, but fell slightly below Wall Street's expectation for $10.3 billion.
The results come amid concerns that Sprint was losing market share to other operators such as AT&T and Verizon's Verizon Wireless.
However, the fall in postpaid subscribers, who pay monthly bills, was not as steep as some had expected. The company said it lost 220,000 postpaid subscribers, compared to the average forecast of 300,000 losses from six analysts contacted by Reuters.
Sprint said it added nearly 600,000 subscribers in the quarter.
Sprint shares had risen in recent months on expectations that the company would return to postpaid subscriber growth in the current second quarter.
The shares were down 50 cents at $19.50 in premarket trade after closing on Tuesday at $20.01.
The stock has fallen around 25 percent from its May 2006 year-high of $26.89 on the New York Stock Exchange, amid concerns that the company was losing market share and struggled to integrate its August 2005 acquisition of Nextel Communications.
For the full year, the company reiterated an outlook for consolidated operating revenue of $41 billion to $42 billion.