Nextel Ups Revenue 612967

Reports 16% increase in revenue to $3.6B and net subscriber additions of 810,000, a 34% increase

April 28, 2005

4 Min Read

RESTON, Va. -- Nextel Communications Inc. (NASDAQ:NXTL)

  • Revenue of $3.6 Billion, up 16%

  • Operating Income before Depreciation and Amortization of $1.3 Billion, up 10%

  • Income of $589 Million, Reported EPS of $0.53, Adjusted EPS of $0.40

  • Free Cash Flow After Rebanding of $562 Million, up 11%

  • Total Subscribers of 17 million, First-Quarter Total Additions of 810,000, up 34%

  • Affirms Full-Year Guidance

Nextel Communications Inc. (NASDAQ:NXTL) today announced record first-quarter results including a 16% increase in revenue to $3.6 billion, a 10% increase in operating income before depreciation and amortization (OIBDA) to $1.3 billion and a 11% increase in free cash flow to $562 million compared to first-quarter 2004. First-quarter total subscriber net additions of 810,000 were up 34% over last year and were fueled by a 138% increase in subscriber net additions for Boost Mobile(TM) service compared to last year's first quarter.

"This year is off to an even stronger start for Nextel than last year's record setting pace," said Tim Donahue, Nextel's president and CEO. "Robust demand for Boost Mobile, Blackberry(R) sales to corporate customers and strong sales to NASCAR(R) fans continue to drive balanced growth, and based on these results, we are affirming our full-year financial guidance. As our merger planning progresses, I am excited for our customers, employees and stockholders, and we look forward to a bright future for the growth-oriented Sprint Nextel combination."

First-quarter 2005 subscriber additions consisted of 496,000 subscribers of Nextel branded service and 314,000 subscribers of Boost Mobile branded prepaid service. Nextel ended first-quarter 2005 with more than 17 million total subscribers - 15.5 million Nextel subscribers and 1.5 million Boost Mobile subscribers - up 22% from 13.9 million total subscribers at the end of first-quarter 2004.

"Nextel's results continue to meet our high expectations for the marketing, branding and profitability of our differentiated wireless services," said Tom Kelly, Nextel's executive vice president and COO. "Strong subscriber and revenue growth from our core Nextel services drove our financial and operating results, and growth from the national expansion of our Boost Mobile life-style branded service offering continues to accelerate. Nextel will remain focused on attracting and retaining high-quality subscribers and delivering on our guidance."

Total revenue for the quarter was $3.6 billion, up 16% over last year's first-quarter revenue of $3.1 billion. Average revenue per unit (ARPU) for Nextel branded service subscribers was $67 in the first-quarter 2005 and the monthly customer churn rate was 1.5%.

Income available to common stockholders for the first quarter was $589 million, or $0.53 per share, and was impacted by a number of items totaling $145 million, or $0.13 per share. Adjusted earnings per share for the first quarter was $0.40 per share, see Table 3 for additional details. OIBDA was $1.3 billion, up 10% from last year. Free cash flow after rebanding was $562 million, up 11% from last year's free cash flow of $507 million.

"Nextel is on track to accomplish its financial, operating and strategic goals for 2005," said Paul Saleh, Nextel's executive vice president and CFO. "Our smart growth initiatives are driving strong growth in customers, revenue and free cash flow. We are investing to attract and retain the most valuable customers in the industry, and we have seen the result as evidenced by our best ever first-quarter churn rate of 1.5%. We are affirming our guidance for the full year."

Capital expenditures were $693 million in the first quarter and spending in preparation for meeting the requirements of the FCC's rebanding order was $86 million. Total system minutes of use in the first quarter on the Nextel National Network increased 30% over last year to 39.4 billion.

During the first quarter, Nextel completed a series of financing actions including refinancing our existing secured term loan "E," conducting a consent solicitation and exchange offer for all the outstanding shares of its Zero Coupon Convertible Preferred Stock, and exchanging $122 million of its 9.5% notes for $133 million of lower interest rate notes. These transactions reduce our annual interest expense and strengthen our financial position.

Nextel Communications Inc.

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