Sprint Nextel (NYSE:S, news, filings) reported earnings today and continued to excel - at redefining the word 'gruesome'. Fortunately, I think the street was expecting the new definition. Revenues were $8.430B, down another 4.3% from $8.816B in Q3 and a bit more than the street expected. For many quarters now the company has lost revenue rapidly, yet managed to generally maintain its cost of revenue - it's just not a good combination. The adjusted loss per share of $(0.01) was actually a bit better than the $(0.03) the street was expecting. The company continued to generate positive cash flow at a reasonable clip, however, adding $536M during the quarter, and expects to continue to generate cash in 2009.
Wireless Segment - Sprint lost 1.3M wireless subscribers, roughly as many as they lost in the third quarter, finishing the quarter with 36.7M post paid, 3.6M prepaid, and 9.0M wholesale and affiliate subscribers. Churn in the wireless business was flat with the third quarter, at 2.16% versus 2.15% - there had been some hope for improvement in this number but at least it didn't get worse given the depth of the recession.
Wireline Segment - Sprint's wireline segment did worse than expected on the revenue front, down 3% sequentially, mostly due to continued weakness in voice revenues which fell 5% sequentially. Legacy data fell 10% sequentially, while internet revenue eeked out a mere 2% growth. However, they made up for it on costs, gross margins rose to 36% and OIBDA margins to 21.4%. Segment operating income of $168M was actually up from $120M in Q3.
One has to keep asking the question... Just how long can they keep doing this? The company projected improvements in subscriber loss in 2009, they'd better be right or they are going to start running low on subscribers to lose. Hopefully this winter is Sprint's darkest hour, and things start to improve with the weather. Please guys, turn it around - we really don't want another industry giant to go under at the moment.
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!Categories: Financials · Internet Backbones · Wireless