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Thursday, October 29, 2009

Sprint Loss Widens On Customer Departures

By Ken Sweet

FOXBusiness

Struggling cellphone carrier Sprint Nextel (S) posted a wider than expected loss on Thursday as subscribers continued to flee the company.

Sprint said it had a loss of $478 million, or 17 cents a share, compared with a loss of $326 million, or 11 cents a share, a year earlier. Revenue fell 9% to $8.04 billion during the quarter.

The results came in worse than the 15-cent loss analysts were looking for while revenue also missed the $8.09 billion expected by analysts.

Sprint lost a total of 135,000 net subscribers in the quarter, the company said, while the company’s subscriber churn rate rose to 2.17% of all customers from 2.15% a year ago and up from 2.05% in the second quarter.

The company cited the subscriber loss to seasonality and heightened competition, most likely from AT&T (T) and Apple’s (AAPL)iPhone. Prepaid churn fell to 6.65% from 8.16% a year ago but rose from 6.38% from the second quarter. In comparison, AT&T reported last week a subscriber churn rate of 1.42%.

Wireless revenue fell 8%, while average monthly revenue per user was flat.

Sprint said that it that the fourth quarter will show quarter over quarter improvement in the company’s post-paid and pre-paid businesses, but expects both divisions to post losses.

Shares of Sprint were recently down 1.5% to $3.19 a share.

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