Sprint Nextel, announced that its profits were down due to lower contributions from its wireless business. The company reported a net decline of 60,000 total wireless subscribers in the third quarter.
“Our third quarter results reflect mixed performance as we address competitive market conditions and manage through credit market impacts on a portion of our customer base,” said Paul Saleh, acting CEO and chief financial officer of Sprint Nextel.
Sprint Nextel Reports Third Quarter 2007 Results
-- Wireless reflects mixed performance between network platforms -- Improved Wireline profitability -- Wireless data and Internet revenues continue strong growth -- Free cash flow* of $1.3 billion in the quarter aided by lower capital expenditures Third Quarter Segment Results Wireless -- Total revenues were $8.7 billion, a decline of 1% sequentially and 4% year-over-year; data revenues increased 28% annually. -- Adjusted Operating Income* was $514 million, compared to $494 million in the second quarter of 2007 and $792 million in the third quarter of 2006. -- Adjusted OIBDA* was $2.6 billion, a decline of 3% sequentially and 18% year-over-year. Third quarter Adjusted OIBDA* exceeded capital expenditures by approximately $1.8 billion. For the year-to-date period, the excess was $4.1 billion. Wireline -- Net operating revenues were $1.6 billion, a decline of 1% sequentially and 1% year-over-year. IP revenues increased 43% compared to the third quarter of 2006. -- Adjusted Operating Income* of $158 million increased from $126 million in the second quarter and $86 million in the year-ago third quarter. -- Adjusted OIBDA* of $290 million improved 12% sequentially and 38% annually. Adjusted OIBDA* exceeded capital investment in the quarter by approximately $150 million and more than $325 million year-to-date.
RESTON, Va.—-Sprint Nextel Corp. (NYSE: S) today reported third quarter 2007 financial results. Consolidated net operating revenues in the quarter were $10 billion compared to $10.5 billion in the year-ago third quarter. Net income in the quarter was $64 million or 2 cents diluted earnings per share, which compares to $279 million or 9 cents diluted earnings per share (EPS) in the year-ago period. Adjusted EPS before Amortization*, which removes the effects of special items and merger-related amortization costs, was 23 cents in the quarter compared to 32 cents in this quarter of 2006. The decline in earnings is due to a lower contribution from Wireless, partially offset by an improved contribution from Wireline.
The company reported a net decline of 60,000 total wireless subscribers in the third quarter. Overall subscriber results include growth from CDMA post-paid, Boost Unlimited, wholesale and affiliate channels. These gains were offset by declines from iDEN post-paid and traditional Boost pre-paid product lines. In the quarter, post-paid churn was 2.3% on seasonally higher involuntary deactivations and competitive market conditions. The Wireless post-paid ARPU* of a little more than $59 in the quarter continues to be supported by data growth, offset by lower voice contributions.
“Our third quarter results reflect mixed performance as we address competitive market conditions and manage through credit market impacts on a portion of our customer base,” said Paul Saleh, acting CEO and chief financial officer of Sprint Nextel. “In the quarter, our Sprint Ahead marketing campaign gained traction, we improved our device portfolio, and we continued to achieve best-ever network performance. Going forward, our clear mandate is to improve the customer experience at every touchpoint and simplify our business. We also plan to focus more resources on customer retention,” Saleh said.