Sprint Q4 loss widens to $1.32B as Nextel customers flee
Sprint's Nextel platform lost more than 1 million subscribers, offsetting progress made by its core business. The company sold 2.2 million iPhones in the period.
Sprint probably can't wait to excise the Nextel part of its business.
The Overland Park, Kan., wireless carrier reported hefty fourth-quarter subscriber losses on the Nextel side, with more than 1 million customers leaving the service, easily offsetting the gains made on its core Sprint business. In total, it lost 337,000 net customers.
Sprint posted a loss of $1.32 billion, or 44 cents a share, compared with a year-ago loss of $1.3 billion, or 43 cents a share. Revenue, however, rose to $9 billion.
The results were better than expected. Analysts, on average, forecast a per-share loss of 46 cents a share and revenue of $8.92 billion, according to Thomson Reuters.
As with AT&T and Verizon Wireless, Sprint felt the burden of subsidies tied to Apple's iPhone. The better the iPhone sells for a carrier, the larger the short-term hit the carrier takes to earnings because of the payment it makes to Apple to keep the iPhone priced at $200. Sprint said it sold 2.2 million iPhones, with 38 percent new to the carrier.
In comparison,in the period. AT&T led the way .
Sprint's core branded service added 683,000 net new customers, with 401,000 signing a long-term contract. But the Nextel network faces continued heavy defections as the carrier gets closer to shutting down the service this year. The Nextel service lost 1.3 million customers in the third quarter and 770,000 in the year-ago period.
As a result, the customer turnover rate at Nextel has jumped even as Sprint side makes some minor improvements.
One positive note: Sprint has managed to recapture half of the Nextel customers leaving the service, although the rest of the defections have gone on to help its rivals.
In addition, Sprint is awaiting a pending merger with Japan's SoftBank, which should infuse the embattled carrier with additional capital to speed up its network upgrade and take a more aggressive posture with competitively priced plans.
Sprint, meanwhile, is also attempting to buy out the stake in Clearwire that it doesn't already own, taking full control of the company and its valuable swath of wireless spectrum.
Like the other carriers, Sprint was hit with expenses related to Superstorm Sandy, with the company taking a charge of $45 million to deal with the damages and blackout.
Updated at 4:31 a.m. PT: to include additional financial details.