Sprint (NYSE: S) Nextel did not say how well the Palm (NSDQ: PALM) Pre sold during the second quarter, however, it sure didn’t help stem the losses.
Sprint Nextel said today it lost a total of 991,000 post-paid customers, which was offset by a gain of 938,000 pre-paid iDen (most likely Boost Mobile users). Overall, the company’s net losses totaled 257,000 subscribers. With pre-paid generating most of the company’s growth, it’s no wonder that Sprint agreed to purchase Virgin Mobile USA yesterday for $483 million to boost its pre-paid offerings. In a release, CEO Dan Hesse acknowledged: “We are not satisfied that we lost a quarter of a million customers in the quarter.”
AP reported that analysts surveyed by Thomson Reuters (NSDQ: TRIN) had expected a loss of 2 cents per share on lower revenue of $8.12 billion. Analysts typically exclude one-time items from their earnings estimates. The company didn’t report an adjusted earnings figure that excludes one-time items.
| 2Q 2009 | 2Q 2008 | |
|---|---|---|
| EPS | ($0.13) | ($0.12) |
| Net Income | ($384 million) | ($344 million) |
| Revenue | $8.1 billion | $9.1 billion |
Release. Earnings Call (8 a.m. ET).
Sprint’s stock fell about 50 cents, or 11 percent, today to $4.09 on disappointing results. Not only did the company continue to lose customers, but the company’s net loss continued to widen to $384 million in the quarter from $344 million in the year ago period. The company also reported lower revenues. In Q2, it recorded revenues of $8.1 billion, falling nearly 11 percent from $9.1 billion in the year-ago period.
Still, in the earnings release, Sprint’s CEO Dan Hesse, found good news to discuss. “In the quarter, we saw the best retail net add performance in the past seven quarters. We also saw the best quarterly sequential change in CDMA net add performance in two years, ARPU that has been stable for six consecutive quarters, continued prepaid growth, and improved sequential Adjusted Operating Income Before Depreciation and Amortization,” Hesse said. “However, we are not satisfied that we lost a quarter of a million customers in the quarter.”
Some figures:
Total wireless customers: 48.8 million customers, including 34.4 million post-paid subscribers (25.1 million on CDMA, 8.3 million on iDEN, and 1.0 million who use both networks).
Handset upgrades: About 9 percent of post-paid customers upgraded their handsets during the second quarter, a slight increase sequentially.
Churn: Post-paid churn in the quarter was 2.05% compared to 2.25% in the first quarter and 1.98% in the year-ago period.
Wireless revenues: Revenues from Boost offset revenue declines from post-paid subscribers. Still, revenues declined 9 percent year-over-year. Post-paid ARPU is about $56 and data revenues contributed $15.50 to overall post-paid ARPU in Q2.
Forecast: Sprint Nextel expects that both post-paid and total subscriber full-year losses should improve in 2009 as compared to 2008.

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