Sprint cuts 2,000 jobs, stock falls 7 percent

Sprint shares down on earnings miss

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Sprint reported a loss of 19 cents per share on Monday, worse than even the most pessimistic of the 15 Wall Street estimates recorded by Thomson Reuters.

Revenue for the quarter came in at $8.49 billion, against the comparable year-ago figure of $7.75 billion.

Analysts had expected Sprint to report a loss of about 6 cents per share on $8.59 billion in revenue, according to a consensus estimate from Thomson Reuters.

The stock fell 7 percent in after-hours trading.

Customer shops at a Sprint store in Miami.
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The company also announced it would be cutting 2,000 jobs. Sprint said this move will be part of its larger cost reduction efforts, and that the firm's total labor cost is expected to decline $400 million on an annualized basis. In total, Sprint said it is targeting $1.5 billion in annualized cost reductions compared to 2014 levels.

Sprint's postpaid churn came in at 2.18 percent, compared to analysts' average expectation of 2.12 percent. Post-paid net losses for the Sprint platform totaled 272,000—analysts had expected a loss of 187,000.

"We have started a transformational journey," CEO Marcelo Claure said in a press release. "While the company continues to face headwinds, we have begun the first phase of our plan and are encouraged with the early results. Every day we are focused on improving our standing with consumers, improving our network and controlling our costs."

Claure, who said Monday was his eighty-fifth day on the job, said on the earnings call that he found the company "in the weakest condition it had ever seen" in terms of per share growth in the market.

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"The Sprint brand was weak—we had no clear value proposition for consumers," he added. "These trends will not be reversed overnight, but it was clear to me we had to act quickly and decisively."

Sprint abandoned its attempts to merge with rival T-Mobile in August amid indications that the regulatory barriers would be significant. Now the two companies are locked in a battle for the title of third-largest U.S. carrier—AT&T and Verizon are both much bigger.

The company's latest promotion—it provides annual upgrades in its "iPhone for Life" plan—has garnered some attention, but it is as yet unclear if consumers will regard it as a gimmick. Claure said in the earnings call that the company is seeing "strong customer adoption" of this plan.