Sprint Nextel Corp. (S) posted a wider-than-expected loss in the first quarter as revenue and subscribers declined.
The nation’s No. 3 wireless service provider said it lost $594 million, or 21 cents a share, during the three-month period ended March 31. The company lost $505 million, or 18 cents a share, the same time a year ago.
Excluding one-time charges -- $327 million of which was tied to the layoffs the company announced in January -- Sprint said it would have lost 3 cents a share. Analysts polled by Thomson Reuters were expecting a loss of 2 cents a share.
Sales for the period fell 12% to $8.21 billion, missing analysts’ estimates of $8.28 billion.
Despite posting less-than-stellar results, Sprint Nextel CEO Dan Hesse said he was proud of the company’s progress in financial stability, improving the customer experience and reinvigorating the brand.
"We achieved the largest sequential improvement in overall gross adds and net adds in Sprint Nextel history, reduced churn versus the prior year, and we generated more than enough cash in this quarter alone to pay all of our 2009 debt maturities,” he said in a statement.
Sprint Nextel’s total net subscriber base fell by 182,000 during the quarter, an improvement from the 1.3 million lost in the fourth quarter. Still, the number of post-paid subscribers -- or subscribers who sign annual contracts -- fell by 1.25 million during the quarter, compared with 1.1 million in the fourth quarter.
The company’s iDEN network saw net growth of 764,000 prepaid customers for the quarter. Sprint Nextel also saw an increase of 394,000 wholesale and affiliate subscribers, boosted by the company’s push to increase market opportunity for open network devices, such as Amazon’s (AMZN) Kindle 2.
Total churn, a measure of the percentage of customers beginning and ending service, was at 2.25% for the first quarter -- a decline from a year ago but an increase from the fourth quarter.
The company said it expects demand to shift from post-paid services to prepaid services amid the current economic environment, but said post-paid and total subscriber full-year losses should improve in 2009.
