Sprint Beats Out Analysts Expectations For First Quarter
Sprint Nextel’s reported first-quarter revenue that beat out expectations for the company.
However, the company lost more wireless subscribers than expected in the first quarter as it faced new competition from Verizon Wireless, which launched the Apple Inc. iPhone in February.
Chief Executive Dan Hesse told analysts on a conference call that Sprint’s new $10 monthly fee for smartphone users did not stop customers from upgrading their devices.
“Even after the $10 charge, our pricing is very, very competitive,” Hesse said.
“Our strengthening brand helped us mitigate what otherwise would have been difficult to navigate: increasing our price in the face of a new iconic competitive device and widespread industry price pressure,” Hesse said.
Sprint has been clawing its way back from years of subscriber losses to bigger rivals like Verizon Wireless and AT&T Inc.
Sprint is opposing AT&T’s proposed $39 billion purchase of T-Mobile on the grounds it will give too much competitive power to one company.
Sprint had reported growth in the fourth quarter in subscribers who pay monthly bills for the first time in over three years.
According to Reuters, Sprint’s revenue jumped 3 percent to $8.3 billion, and was above the analyst expectations or $8.19 billion.
According to Pacific Crest analyst Steve Clement, Sprint’s average monthly revenue per subscriber of $56 rose from $55 in the year-ago quarter and was well ahead of analyst expectations.
“The postpaid net adds was the one area below expectations. Everything else looked solid,” Clement told Reuters, referring to high-value postpaid subscribers who pay monthly bills and commit to long-term contracts.
Sprint lost 114,000 subscribers in the quarter, compared to 578,000 losses in the same period a year before.
Verizon Wireless added 906,000 subscribers in the first quarter in 2011 while AT&T Inc. added 62,000 subscribers.
Sprint added 1.1 million subscribers in the January to March period to its contract-free plans.
Mizuho analyst Michael Nelson said prepaid additions were beyond his expectation for 450,000.
“These are favorable results, they’re encouraging. The company is making steady progress improving its wireless business,” Nelson said.
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