Sprint posts wider-than-expected Q2 loss on Nextel platform shutdown
Sprint Corp. (NYSE:S), the third-largest U.S. wireless carrier, posted a wider loss in the second quarter due to costs for shutting down its outdated Nextel network and gave up more than one million monthly subscribers.
Net loss for the three months that ended June 30 expanded to $1.6 billion, or 53 cents a share, from a net loss of $1.4 billion, or 46 cents a share, a year earlier, the Overland Park, Kansas-based company, which was acquired in July by Japan's SoftBank Corp. (OTCMKTS:SFTBF) for $21.6 billion, said in a statement on Tuesday.
Adjusted loss, excluding unexpected charges pertaining to the Nextel shutdown, was 31 cents a share, weaker than the 30 cents a share loss predicted by analysts polled by FactSet.
Revenue in the April-to-June period grew to $8.87 billion from $8.84 billion a year earlier. That was above the $8.69 billion average estimate of 21 analysts polled by Thomson Reuters I/B/E/S.
Sprint lost 1.045 million contract customers in the second quarter. The number of subscribers dropped to 53.6 million subscribers by the end of June, from 55.2 million at the end of March. Sprint's major competitor Verizon Wireless, co-owned by Verizon Communications Inc. (NYSE:VZ) and Vodafone Group Plc. (NASDAQ:VOD), added 941,000 subscribers, and AT&T Inc. (NYSE:T) added 550,000 net new subscribers during the second quarter.
Sprint said its average revenue per subscriber on the Sprint network rose to $64.20 in the second quarter from $63.38 in the year-earlier quarter as its customers spent more on wireless data services including mobile web surfing.
SoftBank paid $7.65 a share to take control of 78 percent of Sprint. Softbank's $5 billion cash infusion helped Sprint to pursue its own acquisitions, which included the buyout of the remaining shares of Clearwire Corp. (NASDAQ:CLWR), a wireless broadband network operator, for $3.9 billion.
Sprint said that it anticipates 2013 target for adjusted operating income before depreciation and amortization, or OIBDA, excluding non-cash one-time costs related to its SoftBank deal and its July buyout of Clearwire, to be between $5.5 billion and $5.7 billion, which is above its previous forecast.
Sprint, which struggled for years to compete with its bigger rivals, said it will have a capital spending budget of $8 billion in 2013, matching previous forecasts. The carrier is now working on building a faster network, using a standard called long-term evolution, or LTE.
Sprint's shares rose 1.7 percent to $5.84 at 9:30 a.m. in New York on Tuesday.