Sprint Nextel reports Q2 loss, stock slides

07 Aug 2008
00:00

(Associated Press via NewsEdge) Sprint Nextel's up-and-down road to recovery continued as the company reported adjusted second-quarter results that beat Wall Street expectations as well as a slower loss of subscribers.

But the third-largest wireless carrier in the US also said it expected customer losses to ramp back up next quarter and said was selling $3 billion in convertible stock, partly to pay down debt.

Shareholders reacted by hammering Sprint's shares, sending them down $1.21, or 14.2%, to close at $7.34.

Stifel Nicolaus analyst Christopher King said in a research note that he's 'cautious' about Sprint's ability to create 'significant common shareholder value in the near-term,' not only because of issues specific to Sprint but also due to broader dynamics in the U.S. wireless industry.

The Overland Park, Kan.-based company reported that it lost $344 million, during the quarter ending June 30. By comparison, the company earned $19 million, during the same period a year ago.

The one-time items included $149 million in pretax charges for severance, exit costs and asset impairments and other minor costs tied to its 2005 purchase of Nextel Communications Inc.

Revenue fell 11% to $9.06 billion, below the $9.17 billion expected by analysts.

Sprint Nextel's wireless business reported a 12.5% decline in revenue to $7.7 billion as it lost a net of 901,000 subscribers, including 776,000 valuable 'postpaid' customers who pay monthly bills.

That was an improvement from the first quarter, when the company lost 1.1 million subscribers.

© 2008 The Associated Press

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