Telecommunications company Sprint Nextel Corp. (S) Wednesday reported a narrower loss for the fourth quarter, compared to the previous year, helped by lower expenses in spite of a decline in revenues. However, during the quarter, the company continued to lose subscribers in the wireless segment.
The company's net loss for the quarter narrowed to $980 million or $0.34 per share from net loss of $1.621 billion or $0.57 per share in the same quarter last year.
The latest results included a non-cash $306 million charge to increase the valuation allowance on deferred taxes.
On average, 26 analysts polled by Thomson Reuters expected the company to lose $0.19 per share in the quarter. Analysts' estimates typically exclude special items.
The company's net loss for the third quarter was $478 million or $0.17 per share.
Net operating revenues for the fourth quarter dropped to $7.868 billion from $8.430 billion in the corresponding quarter previous year, primarily due to a lower contribution from post-paid wireless service revenues as well as wireline revenues, partially offset by an increase in prepaid wireless service and equipment revenues. Wall Street expected quarterly revenues of $8.03 billion. In the third quarter, the company's net operating revenues declined 9% to $8.04 billion.
In wireless operations, net operating revenues dropped to $6.816 billion from the prior year's $7.192 billion. Service revenues declined to $6.239 billion from $6.561 billion and revenue from Equipment grew to $475 million from $434 million in the same period previous year. The segment's operating loss narrowed to $635 million from $1.817 billion in the prior year.
In retail post-paid subscribers, Average revenue Per User or ARPU slipped to $55 from $56 in the previous year. Churn for the quarter reduced to 2.11% from 2.16%, primarily due to improved credit quality of the customer base.
In retail pre-paid subscribers ARPU rose to $31 from $30. Churn declined to 5.56% from last year's 8.20% due to increased subscriber additions related to the company's national Boost Monthly Unlimited offering.
Total subscriber loss was 148,000 in the quarter, compared to 1.27 million last year and 545,000 in the previous quarter. In retail post-paid subscribers, net losses were 504,000, compared to 1.11 million last year, and 801,000 in the third quarter.
In Wireline segment, net operating revenues dipped to $1.325 billion from $1.521 billion in the prior year, primarily associated with reductions in rate and volume. Voice revenues declined to $611 million from last year's $714 million and Data revenues slipped to $142 million from $209 million, while Internet revenues declined to $548 million from $568 million reported last year. The segment's operating income plunged to $94 million from last year's $168 million.
The third-biggest U.S. wireless carrier's total net operating expenses decreased to $8.412 billion from $10.159 billion in the previous year, largely due to the absence of prior year's goodwill impairment as well as a decline in amortization.
During the quarter, the company completed acquisitions of Virgin Mobile USA, Inc. and iPCS, Inc. Dan Hesse, Sprint Nextel's CEO said, ''Sprint's performance built notable momentum during the second half of 2009, leading to a fourth quarter with the best sequential and year-over-year improvement in net post-paid subscriber results in Sprint Nextel history, and positive post-paid net subscriber growth for services carrying the 'Sprint' brand."
Full-year net loss narrowed to $2.436 billion or $0.84 per share from the previous year's $2.796 billion or $0.98 per share. Net operating revenues dropped to $32.26 billion from $35.64 million generated last year. Analysts expected a full-year loss of $0.69 per share on revenues of $32.43 billion.
Among others in the indusrty, AT&T, Inc. (T) recently reported about 26% growth in its fourth-quarter profit, helped by strong performance from the Wireless segment, which reported a significant increase in subscribers and a lower churn. The Dallas, Texas-based company's net income attributable to AT&T increased to $3.019 billion or $0.51 per share from $2.404 billion or $0.41 per share in the previous year. Total operating revenues slipped to $30.858 billion from $31.076 billion reported last year.
Meanwhile, Verizon Communications, Inc. (VZ) posted a loss for the fourth quarter compared to a profit last year, hurt primarily by significant charges related to workforce reductions. The New York-based company's net loss was $653 million or $0.23 per share, compared to a net income of $1.24 billion or $0.43 per share in the prior-year quarter. Total operating revenues advanced 9.9% to $27.09 billion from $24.65 billion a year ago.
Looking ahead, Sprint Nextel expects that both post-paid and total subscriber losses will improve in 2010, as compared to 2009. The company estimates full-year capital expenditures in 2010 to be up to $2 billion. In addition, the company expects to continue to generate positive Free Cash Flow during 2010.
S closed Tuesday's trading at $3.65, up $0.14, on a volume of 57.08 million shares.
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