Sprint Posts $344M Loss for Q2
Today, Sprint reported a second-quarter net loss of $344 million, or 12 cents a share, compared with a year-ago profit of $19 million, or 1 cent a share. Revenue was down 11 percent at $9.06 billion.
The Overland Park, Kan.-based carrier posted mobile revenue down 12 percent to $7.74 billion, while wireline revenues fell 2 percent to $1.61 billion. The company also announced plans to sell $3 billion in preferred stock. (See Sprint Posts Q2 Loss.)
Sprint continued to bleed customers in the third quarter, with 776,000 of its high-value monthly subscribers dropping its wireless services. In total, 901,000 subscribers left in the quarter, which was actually an improvement over the first three months of the year, but still dire compared to Sprint's larger rivals. AT&T Inc. (NYSE: T) added 1.3 million subscribers in the quarter, while Verizon Wireless added 1.5 million customers. (See Sprint Bleeds Cellular Customers.)
Sprint expects to report higher monthly subscriber losses in the third quarter but says losses won't accelerate from there.
"We expect sequential declines in post-paid gross adds to moderate, and we expect modest pressure on post-paid ARPU [average revenue per user] for the balance of 2008," the company said in a statement.
“It will take some time to fully resolve our challenges,” admitted CEO Dan Hesse on the carrier’s conference call today.
There are some modest signs of turnaround for the operator, however. Monthly subscriber churn -- a.k.a. customer turnover -- was 2 percent during the second quarter, much improved from the previous three quarters.
“The company’s concentrated focus on customer service produced early results the company was hoping for and will have a positive effect on other metrics in upcoming quarters,” writes Technology Business Research Inc. (TBR) analyst Kate Price in a research note.
Sprint has also managed to halt the continued ARPU drop of the last two years. The firm reported ARPU of $56 in the quarter.
Hesse said that "reinvigorating" the Nextel iDEN network has helped with customer retention and is part of Sprint’s overall plan to revamp its brand and turn around its results. "The brand is so important," says Hesse.
Spiffing up Sprint’s tattered image starts with pleasing its existing customers and introducing hot new devices like the iPhone-alike Samsung Electronics Co. Ltd. (Korea: SEC) Instinct, which sold out in Sprint stores across the country. Hesse reckons that focusing on the brand will eventually bring fresh blood by attracting new customers. (See Sprint Bleeds Cellular Customers.)
Despite Hesse’s fresh talk about iDEN, he still didn’t rule out the possibility of selling off the network. "Every option is on the table and every option will continue to be considered," he said. (See SK Telecom: No Plans to Buy Sprint .)
Sprint’s shares were down 12.46 percent, or $1.07, at $7.49, after news of the results today.
— Dan Jones, Site Editor, Unstrung