Reuters: Global Markets: Sprint Nextel bottom line impresses, shares rise

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Sprint Nextel bottom line impresses, shares rise Apr 25th 2012, 12:33 NEW YORK | Wed Apr 25, 2012 8:33am EDT NEW YORK (Reuters) - Sprint Nextel (S.N) posted a quarterly loss on Wednesday that was narrower than many on Wall Street expected as its wireless operating income was boosted by weaker-than-expected subscriber numbers, which helped saved money. Its shares rose 9 percent to $2.70 in premarket trading after closing at $2.47 on Tuesday on New York Stock Exchange. Sprint has been grappling with subscriber losses and costs stemming from a network upgrade project and subsidies for smartphones such as Apple Inc's (AAPL.O) iPhone. The company said that while its Sprint network added 263,000 net subscribers in the quarter it lost 455,000 customers on its Nextel iDen network, which it is shutting down. This implies total net losses of 192,000 subscribers, which was worse than analyst estimates ranging from a loss 150,000 to a gain of 33,000 from six analysts contacted by Reuters. In comparison, both its bigger rivals Verizon Wireless (VZ.N) (VOD.L) and AT&T Inc (T.N) had net subscriber additions in the quarter. Because the number of new Sprint customers was weaker than analysts expected, it helped reduce costs in areas such as subsidies, Roe Equity Research analyst Kevin Roe said. Sprint's adjusted wireless operating income before depreciation and amortization (OIBDA) of $1.05 billion was well ahead of Roe's expectation for $860 million. "You save money when you grow slower," Roe said. "It's a low-quality beat ... because wireless growth underperformed. That's disappointing for their long-term prospects." Sprint, the No. 3 U.S. mobile service provider posted a loss of $863 million, or 29 cents per share, compared with a loss of $439 million, or 15 cents per share, in the year-ago quarter. Revenue rose 5 percent to $8.7 billion from $8.3 billion and was in line with Wall Street estimates of $8.7 billion, according to Thomson Reuters I/B/E/S. Sprint said it expects 2012 adjusted OIBDA to be at the high end of its previously announced forecast of between $3.7 billion and $3.9 billion. It forecast full-year net service revenue growth of 4 percent to 6 percent and said full-year capital expenditures would be about $6 billion. (Reporting By Sinead Carew; Editing by Maureen Bavdek) Link this Share this Digg this Email Reprints

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