U.S’s third largest wireless carrier, Sprint Nextel Corp. (NYSE: S) reported wider-than-expected losses for the fiscal fourth quarter as it kept losing subscribers while huge charge related to the shuttering down of its Nextel Network also dented the bottom line.
Sprint Nextel, which agreed to sell 70% stake to Japan’s Soft Bank for $20 billion last October in order generate much needed capital for competing with more vigor against bigger rivals such as Verizon and AT&T, reported better-than-expected revenue growth as it earned more from the contract user.
For the fiscal fourth quarter, Sprint Nextel reported a loss of $1.32 billion, or 44 cents a share, compared with a loss of $767 million or 26 cents a share, in the year earlier quarter. In the most recently concluded quarter, the Company took a charge of 13 cents a share linked to shuttering of Nextel Platform and Network Vision while a penny was charged towards the devastation caused by hurricane Sandy.
Revenue for the period climbed 3.2% to $9.01 billion.
Analysts, on average, were expecting a loss of 46 cents a share on revenue of $8.92 billion, according to a data compiled by Thomson Reuters.
Operating margin deteriorated. It widened to (7.8%) down from (2.6%) in the year earlier quarter.
During the quarter, Sprint Nextel’s net contract subscribers’ base shrunk by 243,000, compared to a loss of 456,000 subscribers in the preceding quarter. In the fourth quarter of fiscal 2011, the Company gained 161,000 net contract subscribers. Analysts polled by Thomson Reuters were expecting Sprint to lose 292,000 subscribers in the most recent concluded quarter.
While the Sprint brand gained 401,000 contract customers, the Nextel platform lost 644,000 contract subscribers.
In total, the Company ended with 55.6 million customers in the fourth quarter, a gain of 1.1% from the year earlier quarter.
Average revenue per contract user climbed 4.9% to $61.47 from $58.59, in the same period of last year.
The Company said that it sold nearly 2.2 million iPhones in the latest concluded quarter with 38% going to new subscribers.
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