Sprint Loss Reaches $1.32 Billion
Sprint reported fourth-quarter subscriber losses on its Nextel side, losing more than 1 million customers. The loss easily offsets the gains by the company’s core business.
While revenue rose to about $9 billion, the company posted a loss of nearly $1.32 billion which comes out to 44 cents per share. Last year Sprint posted losses at $1.3 billion.
According to Thomson Reuters, losses were less than expected. On average, analysts forecasted a loss of 46 cents per share.
Subsidies tied to Apple’s iPhone have caused a burden for Sprint, as well as Verizon and AT&T. Due to the carriers’ expense toward purchasing iPhones and keeping them priced at $200, carriers compete toward selling the most iPhones in the shortest amount of time which in turn allows them to take a larger short-term hit to earnings. Sprint reported that it had sold 2.2 million Apple iPhones, 38 percent of which were new customers. That’s an increase in iPhone sale for the carrier, representing a 68 percent increase over its last quarter.
Verizon reported selling 6.2 million and AT&T reported selling 8.6 million in the same period.
Sprint’s core service netted 683,000 new customers, with roughly 58 percent, or 401,000, signing long-term contracts. However, the Nextel network continues to face losses and is getting closer to shutting down the service this year. As stated before, the Nextel service lost nearly 1.3 million subscribers in its third quarter and 770,000 in the same period a year ago.
There is a bit of light at the end of Sprint’s dark tunnel though, they’ve managed to retain almost half of the Nextel customers leaving the network.
They’re also on the cusp of a merger with Japan’s SoftBank, which will bring in additional capital to help the carrier upgrade its network and take a more competitive approach in pricing plans.
Sprint’s also trying to completely buyout the Clearwire stake that it doesn’t own, allowing the company to take full control of its wireless network. The buyout would be a $2.2 billion deal however, Clearwire has received higher offers from the Dish Network Corporation. Clearwire said that it would work with both companies, but stands behind Sprint. Sprint has yet to comment on the deal.
Like many others, Sprint took a hit with costs related to Superstorm Sandy. The company spent nearly $45 million to repair damages caused by the natural disaster.
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