Sprint Reports Q1 Loss of $151M
OVERLAND PARK, Kan. -- Sprint Corporation (NYSE:S)today reported operating results for the quarter ended March 31, 2014, including consolidated operating income of $420 million, the company’s best performance in over seven years. Adjusted EBITDA of over $1.84 billion in the quarter grew 22 percent over the prior year period, and Adjusted EBITDA margin of 23.4 percent was the highest in almost six years.
“In the quarter, operating revenue and Adjusted EBITDA both grew year-over-year even as investments in our network improvements continued,” said Dan Hesse, Sprint CEO. “With the expected mid-year completion of the rip and replacement of our core 3G and voice network, the ongoing roll-out of Sprint Spark, and the evolution of Sprint Framily, we plan to build the best customer experience in the industry.”
Quarterly net loss was $151 million in the quarter, a 77 percent improvement from the first quarter of 2013, driven by growth in Adjusted EBITDA of 22 percent compared to last year. Quarterly Adjusted EBITDA of $1.84 billion improved by over $300 million compared to the first quarter of 2013, driven by growth in wireless Adjusted EBITDA, partially offset by a decline in wireline. The growth in wireless Adjusted EBITDA was primarily attributable to lower wireless expenses such as postpaid subsidy associated with impacts of the newly launched Sprint Easy Pay installment billing plan and device sales mix, lower customer care and cost of service expenses.
At the end of the quarter, the Sprint platform served nearly 54 million subscribers. During the quarter, Sprint platform postpaid gross additions grew by over 16 percent compared to the year-ago quarter, and retail smartphone sales were just under 5 million, representing 84 percent of total retail handset device sales in the quarter. Sprint reported a net loss of 231,000 Sprint platform postpaid customers during the quarter largely due to expected elevated churn levels related to service disruption associated with the company’s ongoing network overhaul. Sprint platform prepaid net loss of 364,000 customers was primarily caused by changes in the Lifeline program recertification process that impacted the Assurance Wireless subscriber base. Sprint added 212,000 wholesale and affiliate customers during the quarter.
Sprint 4G LTE coverage is now available to more than 225 million people. The company continues to expect that by the middle of this year 4G LTE coverage will reach 250 million people. Additionally, Sprint’s replacement of its entire 3G and voice network and the nationwide roll-out of high-definition voice service are both expected to be largely complete by mid-year.
Deployment of Sprint Spark is also progressing with today’s launches in six more cities, including, Orlando, Fla. and Oakland, Calif. Sprint Spark is now available in 24 markets across the country and 14 Sprint Spark-capable devices are currently available, including the recently launched Samsung Galaxy S 5 and HTC One (M8).
Sprint Corp. (NYSE: S)