Sprint Nextel Corp. (S), the third-largest wireless provider in the U.S., reported Thursday a wider net loss for its third quarter, hurt by lower revenues mainly from its wireless segment due to subscriber losses. Top line fell 8% and missed the market projections. Looking ahead, the Overland Park, Kansas-based telecommunication company said it expects post-paid and total subscriber net losses to improve sequentially in the fourth quarter and also for the full year.
Third-quarter net loss was $478 million or $0.17 per share, wider than net loss of $326 million or $0.11 per share last year. On average, 22 analysts polled by Thomson Reuters expected the company to report loss of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.
Net operating revenues for the quarter declined 9% to $8.04 billion from $8.82 billion in the same quarter last year, and missed Wall Street analysts' consensus estimate of $8.09 billion. The company attributed the decline in revenues mainly to lower contribution from post-paid wireless service revenues as well as wireline voice and legacy data revenues, partially offset by higher prepaid wireless service and equipment revenues.
In its preceding second quarter, Sprint Nextel reported a wider net loss of $384 million or $0.13 per share, hurt by a decline in both wireless and wireline revenue. Net operating revenues for the quarter were $8.14 billion, down 10% from last year.
The company's wireless net operating revenues in the third quarter fell 8% to $6.93 billion from $7.54 billion last year, due to fewer post-paid subscribers, partially offset by more prepaid subscribers.
In the Wireless segment, the company served 48.3 million customers at the end of the third quarter of 2009, and net retail subscribers declined by a total of 135,000 and net wireless customers declined by approximately 545,000. Meanwhile, the company gained a net 801,000 prepaid iDEN customers, offset by net losses of 135,000 prepaid CDMA customers.
Post-paid churn in the quarter was 2.17%, compared to 2.15% in the year-ago period, while prepaid churn dropped to 6.65% from last year's 8.16%.
Commenting on the results, Dan Hesse, Sprint Nextel Chief Executive Officer, said, "Sprint achieved its best net retail subscriber results in more than two years and improvement in both post-paid and prepaid gross subscriber additions in the third quarter."
Wireline net operating revenues declined 10% to $1.41 billion from $1.58 billion last year, as voice and data declines more than offset 5% growth in Internet revenues. Voice revenues for the quarter declined 14% from last year.
Total adjusted OIBDA was $1.51 billion, down 17% from $1.82 billion a year ago. Adjusted OIBDA margin dropped to 20.0% from prior year's 21.9%.
Among peers, Verizon Communications Inc. (VZ), the No. 1 mobile carrier in the U.S., posted Monday a decline in third-quarter profit to $2.89 billion or $0.41 per share from last year's $3.19 billion or $0.59 per share, reflecting higher merger and restructuring costs. Operating revenues grew 10.2% to $27.3 billion from $24.8 billion in the previous year. On a pro forma basis, operating revenue growth was 0.6%.
AT&T Inc.(T), the second-largest wireless provider in the U.S. and the exclusive provider of Apple Inc.'s (AAPL) iPhones in the nation, recently reported a 1.2% decline in its third-quarter profit to $3.19 billion or $0.54 per share, on continued weakness in the wireline business. Total operating revenues fell 1.6% to $30.86 billion. The company noted that growth in wireless and advanced wireline data services in large part offset declines in voice, legacy data and print advertising products.
Wednesday, telecommunications service provider Qwest Communications International Inc. (Q) reported a 6.2% decline in third-quarter profit to $136 million or $0.08 per share, as total access lines fell 11.0% from last year. The Denver, Colorado-based company's quarterly operating revenues amounted to $3.05 billion, 9.6% lower than the previous year's operating revenue of $3.38 billion.
For the nine months of fiscal 2009, Sprint Nextel's net loss widened to $1.46 billion or $0.51 per share from prior year's loss of $1.18 billion or $0.41 per share. Net operating revenues dropped 10% to $24.39 billion from $27.21 billion a year ago.
Looking ahead, Sprint Nextel said it projects that both post-paid and total subscriber net losses to improve sequentially in the fourth quarter, and expects to continue to generate positive free cash flow during the quarter.
The company continues to expect that both post-paid and total subscriber full-year losses should improve in 2009 from last year, and expects that fiscal 2009 capital expenditures will be less than $1.7 billion.
S is currently trading at $3.34 in the pre-market activity, down $0.10 or 3.09%. In the past 52 weeks, shares have been trading between $1.35 and $5.94.
For comments and feedback: editorial@rttnews.com