Sprint Nextel Reports Low Earnings and Subscriber Growth

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Sprint Nextel Reports Low Earnings and Subscriber Growth

7:00 am on April 27, 2006 | Category: Business, Telecom Services, Wireless, Corporate

America’s number three wireless provider, Sprint Nextel, reported lower-than-expected first quarter financial results yesterday, largely due to high merger expenses, as well as disappointing subscriber growth and profit margins.

The company’s net income came to $417 million for the quarter, which is 11% lower than the $470 million generated by Sprint alone in the first quarter of last year.

Excluding $0.21/share in one-time expenses, Sprint Nextel’s profit would have been $0.35/share, but this is still $0.02 lower than average forecast of analysts.

“I simply don’t see much in the way of good news overall,” commented Stifel Nicolaus analyst Chris King on the numbers. “They’re clearly losing significant market share to both Cingular and Verizon for postpaid retail subscribers.”

Sprint Nextel CFO, Paul Saleh, claimed that the earnings only fell short of estimates because analysts expected too much too soon in the way of merger savings.

Subscriber growth was also slightly below estimates, however, with 1.3 million new customers added in the period, compared to the 1.4 million expected by analysts.

For the moment, Sprint Nextel is becoming a more and more distant third to market leaders, Cingular, which added 1.7 million users last quarter, and Verizon, which is set to report its results next week. Sprint needs to find new ways to effectively market and appeal to customers if it hopes to keep up with the game in its post-merger state.

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You reporters and analyst make me sick! You are now praising Cingular, what about when they first merged with AT&T Wireless? “We don’t think it makes much sense for two companies on the low end of the scale on dependability to merge together”. How long did it take for Cingular to turn a profit? Over a year. Sprint Nextel is already turning a profit, even though they have had to buyout most of their partners and affiliates.
Sprint Nextel now has 51 million customers, How is that bad?!? Sprint Nextel is worth almost 80 Billion, more then any other wireless carrier in the US and one of the largest on earth.

You people are such turncoats! Stay loyal during the good and the bad, or get lost! What is wrong with these numbers??

Comment by Jason — April 28, 2006 #
Why did you delete my post? Did what I say make too much sense? You are bashing Sprint Nextel now, even though they now have 51 million customers. Even though Sprint Nextel is worth almost 80 Billion, more then any other carrier. Even though they are still turning a profit, even when it took Cingular over a year to do the same.
You reporters will turncoat over anything.
How are the numbers you are listing bad? They are not, but you are spinning them to be.

Post the facts, don’t slant the facts to fit your needs.

Comment by Jason — April 28, 2006 #
Hey, calm down a little - I didn’t delete anything. It merely takes a few hours for me to manually check over and approve comments.

As for being a turncoat, I think you’re totally mistaken. I have no bias for Cingular over Sprint Nextel or vice versa, but facts are facts. Financial numbers go up and down all the time, and I certainly don’t expect Sprint to stop turning a profit anytime soon. The company simply has a bit of catching up to do in the months to come, and the positions could very well be reversed by this time next year.

Anyway, you don’t have to get quite this excited about financial numbers. Stress is bad for your health after all

Have a nice day.

Comment by Jeremy — April 29, 2006 #
I hear you Jason I also take offense to all of this Sprint Nextel bashing… Every single article on Google news is putting Sprint down for having a few lower numbers this quarter… I don’t see any of these people posting any of the positive news…But that is to be expected from Non-Sprint customers…Unless you are a Sprint or Nextel customer that has seen your provider build up from nothing to become a powerful, leading company then you will put them down for any reason.
What about Sprints EV-DO? Verizon was building theres a year before Sprint but now Sprint’s EV-DO network is larger then Verizons!!!
What about the higher end phones Sprint is getting???
What about the cheaper PDA data prices???
What about the F&Flex and Free incoming plans???
What about nights starting at 6PM???
Those to me mean more then some stupid numbers!!! Stay loyal jason!!!

Comment by Mitra Messer — May 1, 2006 #