Sprint posts smallest quarterly loss in 4 years

Oct 26, 2011 By PETER SVENSSON , AP Technology Writer
A Samsung Galaxy Tab tablet is displayed at the Sprint store in Stoneham, Mass., Tuesday, Oct. 25, 2011. Sprint is reporting its smallest quarterly loss in four years, as it's continuing a turnaround and getting better at keeping and attracting customers. (AP Photo/Charles Krupa)

(AP) -- Sprint Nextel Corp. on Wednesday reported its smallest quarterly loss in four years, as it continued a turnaround and kept getting better at keeping and attracting customers.

The country's No. 3 wireless carrier added a net 1.3 million subscribers in the July to September period, the best result since 2006. Sprint continued to lose subscribers from its lucrative contract-based plans, but at a relatively low rate: 44,000 in the quarter.

Sprint's total customer count, 53.4 million, is now back at where it was in 2007, before the exodus of Nextel customers turned into a torrent.

The Overland Park, Kan.-based company has made steady gains in the last year and a half. Unfortunately for the company, most of the new customers are low-paying ones. They buy service from Sprint's low-cost , Boost Mobile or Assurance Wireless brands, or from non-Sprint brands that use the company's network.

The latest subscriber results don't include the effect of the , which Sprint started selling Oct. 14. The phone is expected to further improve the carrier's ability to keep customers, but at a high price. Apple charges about $600 for a phone that Sprint sells for $200.

Joe Euteneuer said each iPhone will cost the company about $200 more than another . All the same, the company expects its four-year purchasing agreement with Apple to add $7 billion to $8 billion to its own bottom line.

CEO Dan Hesse compared getting the iPhone to signing a star baseball player to the "Sprint team."

"He has an expensive contract, but he's worth every penny," said Hesse, who often draws on sports analogies.

The problem for Sprint is that the cost of selling the iPhone comes up front, while the benefits, like higher service fees and lower service costs, accrue over time. Sprint doesn't expect the iPhone to be a until 2014.

The added cost of the iPhone comes as Sprint is also starting to revamp its network for higher speeds. That adds up to financing needs of $5 billion to $7 billion in the next few years, Euteneuer said.

Euteneuer said the terms of the deal with Apple are confidential, but said there's a minimum commitment to buy $15 billion in iPhones over four years. That works out to about 25 million phones, a figure in line with a report in The Wall Street Journal early this month that the company had committed to buying 30 million iPhones over four years.

Sprint on Wednesday said it had raised the limit on its credit line by $150 million and amended the terms so that an increase in the total amount of phone discounts doesn't affect its creditworthiness. It said it had $1 billion undrawn on the line.

Sprint's net loss was $301 million, or 10 cents per share, for the third quarter. That's down from $911 million, or 28 cents per share, a year ago. It was the best performance by Sprint since it reported a profit of $64 million in the third quarter of 2007.

Revenue rose 2.2 percent to $8.3 billion.

Analysts polled by FactSet expected a loss of 22 cents per share on $8.4 billion in revenue.

Its shares slipped 6 cents, or 2.2 percent, to $2.64 in premarket trading after rising earlier.

Hesse also said the company has started discussions with Clearwire Corp. on how to make Sprint phones compatible with Clearwire's planned new wireless data network, and a discussions on commercial arrangements are ongoing. That sent Clearwire shares up 41 cents, or 25 percent, to $2.05 in pre-market trading.

Sprint owns 54 percent of Clearwire and uses its current data network for "Sprint 4G" service. But it doesn't control Clearwire's board, and the relationship between the two management teams has been cool.

Earlier this month, Sprint said it would stop selling phones compatible with Clearwire's current data network at the end of next year, with no mention of plans to use the planned "LTE" or "Long-Term Evolution" network. That sent Clearwire shares plunging.

Explore further: Judge approves $450 mn deal in Apple ebook suit

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Sprint: No more Clearwire devices after 2012

Oct 07, 2011

(AP) -- Sprint Nextel Corp. said Friday that it will stop selling phones and other devices compatible with Clearwire Corp.'s network at the end of next year, as it switches customers to its own higher-speed, fourth-generation ...

Sprint down after testy meeting with analysts

Oct 08, 2011

(AP) -- The struggling wireless carrier Sprint Nextel Corp. said Friday that it will need to raise more money to build a higher-speed data network even as it must spend more to subsidize sales of the new iPhone to its customers.

Sprint adds 1.1M subscribers, halves 1Q loss

Apr 28, 2011

(AP) -- Sprint Nextel Corp. on Thursday said it added more wireless subscribers in the first quarter than it has in five years, mainly on cheap service plans, as its turnaround continued despite the new threat ...

Sprint gains contract subscribers in 4Q

Feb 10, 2011

(AP) -- Sprint Nextel Corp. said Thursday it managed to post a quarterly net gain of contract subscribers for the first time since 2007, as its turnaround continues.

Sprint Nextel posts first subscriber gain in 3 yrs

Jul 28, 2010

(AP) -- Sprint Nextel Corp. said Wednesday that it gained subscribers in its latest quarter, the first such gain in three years, as it continued to improve customer service and retention.

Recommended for you

Dish restores Turner channels to lineup

Nov 21, 2014

Turner Broadcasting channels such as Cartoon Network and CNN are back on the Dish network after being dropped from the satellite TV provider's lineup during contract talks.

'Call of Duty' blasts past $10 bn in sales

Nov 20, 2014

Blockbuster military shooter video game "Call of Duty" has blasted past $10 billion in lifetime sales, propelled by demand for the latest installment in the 11-year-old franchise.

Square's point-of-sale service goes global

Nov 20, 2014

Financial services startup Square is taking aim at cash registers across the globe, making its point-of-sale software available internationally in English, Spanish, French and Japanese.

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

that_guy
not rated yet Oct 26, 2011
smallest quarterly loss in 4 years...wow.

I will give Dan Hesse credit though, since I left sprint in 2007 ironically, I've heard that sprint has gotten much better. He took over a company that was literally being run into the ground.

Although the clearwire thing was kind of a fiasco.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.