(By Balaseshan) Sprint Nextel Corp. (NYSE:S) posted a wider quarterly loss as an increase in operating expenses offset revenue growth. Despite revenue missing consensus, the loss was narrower than the Street's expectations.
The Overland Park, Kansas-based mobile service provider's loss per share widened to 26 cents from 10 cents in the year-ago quarter, but was narrower than the consensus estimate of a loss of 43 cents.
The latest quarter results included accelerated depreciation of $397 million, or negative $0.13 per share (pre-tax), primarily related to Network Vision, including the expected shutdown of the Nextel platform.
Net operating revenue rose 5 percent to $8.76 billion, missing market expectations of a 5.70 percent growth for the third quarter. The year-over-year improvement was primarily due to higher wireless service and equipment revenues, partially offset by a reduction in wireline revenues.
Total net operating expenses jumped 10.7 percent to $8.99 billion. The operating loss was $231 million, compared with a profit of $208 million last year, primarily due to higher wireless equipment net subsidy and estimated Network Vision related expenses.
Wireless customer net losses were 423,000, compared with net additions of 1.28 million in the year-ago quarter. The Sprint platform added 410,000 net postpaid customers, while the Nextel platform lost 866,000 net postpaid customers during the three month period.
Total retail post-paid churn was 2.09 percent, compared with 1.91 percent in the same period of last year.
Sprint reported 1.5 million iPhone sales in the quarter ended September, with 40 percent representing new customers. The company also surpassed 1 million LTE smartphones sold prior to the launch of the iPhone 5.
Adjusted OIBDA margin declined to 16.0 percent from 18.2 percent in the prior-year period.
Looking ahead into the full year 2012, the company expects adjusted OIBDA to slightly exceed the high end of the previously stated forecast of between $4.5 billion and $4.6 billion.
Sprint continues to anticipate full year consolidated net service revenue growth of 4 percent to 6 percent (consolidated revenue less wireless equipment revenue). The company now expects full year capital expenditures of less than $6 billion in 2012, excluding capitalized interest.
S is trading down 0.18 percent at $5.61 on Thursday. The stock has been trading between $2.10 and $6.04 for the past 52 weeks.