Earnings: Sprint Beats Expectations As Low-Cost Boost Service Lures Customers
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Sprint (NYSE: S) Nextel posted a first quarter net loss of $594 million, or 21 cents per share, compared to a lost of $505 million, or 18 cents a share a year ago. But stripping out the severance related charge of $327 million, Sprint said it would have posted a profit of 3 cents a share, much better than the 5 cents a share loss a survey of Bloomberg analysts had forecast.
SEE ALSO: Earnings: Sprint Nextel Narrows Loss To $1.6 Billion Amid Continued Customer Flighthttp://investors.sprint.com/phoenix.zhtml?c=127149&p=irol-newsArticle&ID=1283521&highlight=
Sprint’s better-than-expected performance was driven partly by its cutting jobs and by more customers flocking to its pre-paid service Boost Mobile and its popular $50 unlimited plan, which helped the country’s third largest carrier add a net 764,000 new customers. Overall, Sprint lost 182,000 net customers, much better than analyst projections of 490,000. Still, the carrier lost 1.25 million contract customers, higher than forecasts of 1.1 million.
Revenue, meanwhile, fell 12 percent to $8.21 billion from $9.33 billion, compared to a year ago.
More earnings details after the jump.
Release | Presentation |Webcast
—Wireless service revenues:Q1 wireless service revenues fell 10 percent year-over-year and 2 percent from Q4 to $6.4 billion, blamed squarely on customer defections.
—Wireless post-paid churn: Post-paid churn rose to 2.25 percent, compared to 2.16 percent in the fourth quarter, but declined when compared to 2.45 percent from a year ago. Sprint blamed the increase in churn on the economic crisis as more businesses cut their wireless bills by deactivating accounts. Churn was also up as Sprint continued to pursue post-paid customers with better credit ratings.
—Boost churn down: Boost churn in the first quarter was 6.86 percent, compared to 8.20 percent in the fourth quarter of 2008, and 9.93 percent in the year-ago period. Churn improved as fewer users left the service, and the introduction of the Boost Monthly Unlimited plan for $50.
—Wireless post-paid ARPU stable: Post-paid ARPU remained steady at $56, both year-over-year and sequentially, thanks primarily to its fixed rate plans such as Simply Everything.
—Prepaid ARPU up: Q1 prepaid ARPU was approximately $31 compared to $29 in the year-ago period and $30 in the fourth quarter of 2008, driven by Boost’s unlimited plan.
— Data revenues: Data revenues made up over $15 of overall post-paid ARPU in the first quarter. CDMA data ARPU increased about 5 percent from the fourth quarter to greater than $18, and now represents more than 31 percent of total CDMA ARPU.
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