Nextel Boosts Revenue

Nextel posts strong Q1: revenue increased 31% to $3.1B, net income increased 184% to $591M, and earnings per share were up 152% to $0.53

April 22, 2004

4 Min Read

RESTON, Va. -- Nextel Communications, Inc. (NASDAQ:NXTL), today announced strong financial and operating results for the first-quarter 2004. Highlights compared with last year's first quarter include a 31% increase in revenue to $3.1 billion, a 33% increase in operating income before depreciation and amortization (OIBDA) to $1.2 billion, and a 184% increase in income available to common stockholders to $591 million, or $0.53 per share. Last year's first-quarter revenue was $2.4 billion, OIBDA was $906 million, and income available to common stockholders was $208 million, or $0.21 per share. During the quarter, free cash flow increased 152% to $507 million over last year's $201 million.

"Wireless services continue to lead the growth in the telecommunications industry with Nextel contributing more than its fair share to those results with 30% plus year-over-year growth in revenue and OIBDA, and triple digit year-over-year growth in income, EPS and free cash flow," said Tim Donahue, Nextel's president and CEO. "Nextel is investing to expand our coverage, appeal to new high-value segments through our NASCAR(R) partnership and the Boost Mobile brand, and to introduce new services such as International Direct Connect. First-quarter trends give us confidence that these investments will build upon our momentum in the coming quarters."

In the first quarter, Nextel grew subscribers by 474,000 - approximately the same as last year's first-quarter additions - while average monthly revenue per subscriber (ARPU) increased $2 to $69 compared with last year's first-quarter ARPU of $67. Customer churn was 1.7% on a monthly basis down from last year's first-quarter monthly churn of 1.9%. In addition, Boost Mobile added 132,000 subscribers during the first quarter. Nextel ended the first quarter with approximately 13.4 million subscribers and Boost Mobile ended the quarter with approximately 537,000 subscribers.

"Nextel's smart growth strategy once again drove strong and consistent top line growth in the business. Average monthly revenue improved over last year due to new revenue streams coupled with disciplined pricing. We also posted our eighth consecutive quarter of 40% or greater OIBDA margins," said Tom Kelly, Nextel's executive vice president and COO. "We are very excited about growth opportunities in the business resulting from new services, network and distribution expansion, new handsets and our NASCAR partnership and we are raising our subscriber guidance to 1.9 million or more subscriber additions this year."

"Nextel is off to a strong start in 2004," said Paul Saleh, Nextel's executive vice president and CFO. "Our first-quarter results demonstrate Nextel's ability to sustain its track record of superior financial performance. Our continued focus on subscriber quality and profitability is allowing us to deliver strong top line growth and industry leading OIBDA margins of 43%. With first-quarter free cash flow in excess of $500 million and a net debt position under $8 billion, Nextel is further strengthening its financial position. We expect to build on this momentum and we are raising our subscriber and free cash flow guidance."

As of March 31, 2004, Nextel had outstanding $10.4 billion of debt, mandatorily redeemable preferred stock and capital leases, down from $13.0 billion at March 31, 2003. During the first-quarter 2004, Nextel received significant debt rating upgrades. Nextel ended the first quarter of 2004 with approximately $2.7 billion in cash, cash equivalents and short-term investments.

Domestic capital expenditures were $537 million in the first quarter of 2004. Total domestic system minutes of use on the Nextel national network increased 40% during the quarter when compared with the same period in 2003 to approximately 29.6 billion total system minutes of use. Monthly subscriber usage increased 15% to 750 minutes of use when compared with last year's first-quarter usage of 650 minutes.

Revised 2004 Guidance

Nextel's 2004 Guidance is forward-looking and is based upon management's current beliefs as well as a number of assumptions concerning future events and as such, should be taken in the context of the risks and uncertainties outlined in the Securities and Exchange Commission filings of Nextel Communications Inc. Nextel's current outlook for 2004 results is as follows:

  • $4.9 billion in OIBDA, or more - unchanged

  • $1.7 billion or more in free cash flow, up from $1.6 billion

  • $2.00 in earnings per share, or more - unchanged

  • Capital expenditures of approximately $2.2 billion - unchanged

  • Subscriber additions of 1.9 million, or more, excluding Boost Mobile, up from 1.8 million

Nextel Communications Inc.

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