Sprint Nextel's 4Q Revenue, Profit Rise

[Dan]

Sprint Nextel's 4Q Revenue, Profit Rise
Wednesday, February 28, 2007 2:32 PM EST
The Associated Press
By DAVID TWIDDY

KANSAS CITY, Mo. (AP) — Sprint Nextel Corp., the nation's third largest wireless carrier, said Wednesday that fourth-quarter profits rose 33 percent on stronger revenue, but the company continued to lose high-quality subscribers.

The company, based in Reston, Va., with operational headquarters in Overland Park, Kan., reported earning $261 million, or 9 cents per share, during the October-December period, compared with $195 million, or 7 cents per share, a year earlier.

The fourth quarter earnings were one penny better than that expected by analysts surveyed by Thomson Financial.

Revenue for the quarter rose 6 percent to $10.44 billion from $9.79 billion, surpassing analysts' prediction of $10.39 billion.

Sprint Nextel shares, which have traded in a 52-week range of $15.92 to $26.89, were up $1.30 at $19.75 in afternoon trading Wednesday on the New York Stock Exchange.

The company's customer base grew by 1.3 million customers during the quarter, to end the year at 53.1 million. But that number reflected gains in less-valuable "pay-as-you-go" customers, whereas monthly subscribers, who tend to generate more revenue, fell by 306,000. And once again, most of the lost "post-paid" customers came from the Nextel side, which has been struggling with network quality issues. Nextel's subscribers are especially valuable because many of them are business users with higher monthly bills.

Chief Executive Gary Forsee told analysts in a conference call that the company has invested heavily in the Nextel network to avoid dropped calls and poor signal quality. He also said the company plans next year to introduce Q-Chat, an application that places calls across both networks. The company already has begun rolling out hybrid Nextel phones that can connect with the data portion of the Sprint network.

Sprint Nextel also is attempting to weed out low-quality customers through tougher credit requirements. Chief Financial Officer Paul Saleh said that would continue to hamstring growth in the first quarter, but that he expected post-paid customer numbers to begin rising in the second quarter.

The company first warned of disappointing subscriber numbers in January, adding that it planned to cut 5,000 jobs. Forsee said he expects most of those job cuts to be completed by April 1, saving the company $400 million annually.

The company acquired 830,000 new subscribers from wholesale channels. Boost Mobile, the company's youth-oriented pre-paid service, saw a gain of 171,000 customers.

Post-paid churn, or the measure of subscribers dropping their service, improved slightly to 2.3 percent per month of the subscriber base. That was down from 2.4 percent in the third quarter, but still above the 2.1 percent churn reported in the year-ago period.

The company said most of those dropping service were in markets served by former affiliate Nextel Partners, which the company bought last year.

Average revenue per post-paid user declined during the quarter to $60, 1 percent below the third quarter and about 5 percent lower in the final quarter of 2005.

The company's long-distance phone business continued to shrink, with revenues dipping 2 percent to $1.64 billion. But the company said it was now serving 1.5 million customers through its partnership with four cable companies, an 80 percent gain over the end of 2005.

For all of 2006, profit slumped to $1.33 billion, or 45 cents per share, from $1.78 billion, or 87 cents per share, in 2005. Revenue rose 43 percent to $41.03 billion. The 2005 results only include revenue from Nextel Corp. starting in August, when the merger was completed.

The company reiterated the 2007 guidance it issued on Jan. 8, saying it expected annual revenue between $41 billion and $42 billion.

Analysts predict 2007 earnings of 82 cents per share on $41.14 billion in revenue.

———

On the Net:

www.sprint.com


http://www.adelphia.net/news/read.php?id=13491883&ps=1014&cat=&cps=0&lang=en

[NINO63004]

i read this today. its has its goods and bads. i still think sprint is going to turn around and become a great company like it was back in the day.



Nino

[shamefulzero]

this is good right? i mean the ship is starting to turn around instead of sink. with the release of the power source phone which have been out for 3 months now (?) isnt sprint offering them the powersource phones? so this quarter 1st q 2007 shouldnt be that bad if not better then the previous two quarters.

i hope thats what will come of 1st quarter 2007. then we can get back to the sprint we knew of back in 2002

[Ice Cold]

Profits up Oh Really, when your at the bottom theres no where to go but up.

lets see if Sprint can manage to lose another 300k customers in Q1 07 like they did in Q4 06

[larry]

Profits up Oh Really, when your at the bottom theres no where to go but up.

lets see if Sprint can manage to lose another 300k customers in Q1 07 like they did in Q4 06

There's no way they will lose 300k again this time. If they do lose some it will be closer to 100k or they will break even.

[DJRider]

Profits up Oh Really, when your at the bottom theres no where to go but up.

lets see if Sprint can manage to lose another 300k customers in Q1 07 like they did in Q4 06


Ice you seem to be very Sprint negative as I have read many of your posts. If you feel Sprint is so bad and they are at the bottom,,,why do you stay with Sprint?

[Dan]

Profits up Oh Really, when your at the bottom theres no where to go but up.

lets see if Sprint can manage to lose another 300k customers in Q1 07 like they did in Q4 06


Any time you beat "The Street" its a good quarter.

As the article says, they have been dumping credit challenged customers over the last couple of quarters, and the iDEN network is where the losses have happened due to poor CS relations with former Nextel Partners area customers.

Many people found negotiating with nextel partners to not be worth it and ported to cingular or verizon. I know my union hall switched from nextel partners to cingular at contract time because of poor CS and coverage issues that they didnt have to deal with by switching to cingular.

[Wayne 1]

Good news! :)

[EDGE23]

those adds during 24 must be really helping, or could it be that i got a large bill of 478 dollars?

[lennyj17]

All Sprint needs to do is stay the course Aggressive Marketing (We've been calling for it for years) and Migrating people from Iden Only to Hybrid or CDMA. We have seen the worst and the fact that Sprint has not had a net loss yet to report speak for itself....Nextel would been out of the market by this time w/o merger...Sprint was handed a hot mess and weathered the storm, not perfectly but they got through it.

[sprintadv]

Ice you seem to be very Sprint negative as I have read many of your posts. If you feel Sprint is so bad and they are at the bottom,,,why do you stay with Sprint?

You can tell he doesn't know much about Sprint or reading comp or business, considering he took the net defection out of context. The street must know something cause our stock has been up the last couple of months.

That from some1 who is using a CDMA phone & was flip flopping like a fish out of H20 on his phone choice. :rolleyes:

[Dan]

You can tell he doesn't know much about Sprint or reading comp or business, considering he took the net defection out of context. The street must know something cause our stock has been up the last couple of months.

That from some1 who is using a CDMA phone & was flip flopping like a fish out of H20 on his phone choice. :rolleyes:


The rumored merger has driven the stock up, with people hoping for the premium usually paid on the stock price during a merger or acquisition.

Also, the idea that weeding out the highest risk contract customers is good business sense likely has "the street" looking more favorably at sprint. Now if they could only end the hemorrhaging at the Nextel side.............


:wavey:

[shamefulzero]

The rumored merger has driven the stock up, with people hoping for the premium usually paid on the stock price during a merger or acquisition.

Also, the idea that weeding out the highest risk contract customers is good business sense likely has "the street" looking more favorably at sprint. Now if they could only end the hemorrhaging at the Nextel side.............


:wavey:

thats the idea behind the ic's right! sprint hopfully has been handing them out to customers wanting to cancel.

does anyone know if sprint is actully doing it. we just have 30 more days to find out!

[Dan]

thats the idea behind the ic's right! sprint hopfully has been handing them out to customers wanting to cancel.

does anyone know if sprint is actully doing it. we just have 30 more days to find out!


If sprint was smart, they would give the phone away free for a 1 month trial and let the customer decide if they want to cancel or if the ic phone is worth staying with s/n. Unhappy customers dont want to pay to see if they will be happy with an unproven (to them) service, they would rather port to what they "know" like cingular or verizon.

[shamefulzero]

yeah Free is what i was refering to. i hope from jan 1st -march 31st nextel customers have been getting them free, to slow the bleeding. does any sprint employee on here know?

[Ice Cold]

I'll wait to pass judgement when I see the Q1 07 numbers my gut says there will be around the same 300k is loss in customers

For these reasons

#1. Sprint especially Nextel is sucking badly customer services problems if reps have a hard time dealing with a 1 user 1 phone contract how do they deal with companies or small buisnesses yikes
#2. The iPhone every single OOC out of contract person will Jump for an iPhone period. This will be called the iPhone effect bye bye OOC people :wavey:
#3. Unless your on a sweet SERO plan or Retentions deal Sprint doesn't have anything intresting to offer the customer, booring plans, booring phones same prices.
#4 No cohesive tight marketing or brand loyalty no Brand identity

Customer love to identify with a product Pepsi, Mustang Nikes iPods Playstation etc
theres a brand identity behind each one Timberland Polo, Craftsman
Now Cingular they have that same guy doing the VOICE for Cingular the new AT&T its unified everyone knows AT&T is getting the iPhone
T-Mobile Katherine Zeta Jones the color pink brand identiy
Verizon the same guy with glasses can you hear me now catch phrase.
all unified brand identities

Now look at Sprint each add they run is different that Actor in a suit, those 2 guys comparing EVDO speeds or Some NASCAR thing that talks about Nextel more than Sprint they are all over the place scattered

SPRINT NEEDS A CATCH PHRASE!!!

#5 COMPUSA one of Sprint huge partner cell phone sellers is closing 100 of its 200 stores so ComPUSA will probably drop Sprint all together they are already selling unlocked GSM phones and are a huge Apple partner they will probably Adopt Cingular AT&T to get the iPhone in the stores and Cingular does activate unlocked phones which CU sells happy union bye bye Sprint partnership I saw this one comming

#6. Verizon recently acquired a Homeland Security contract for cell phones that Sprint was hoping to get they didn't get it.

[Wayne 1]

"Power Up", Back to the drawing board? :Popcorn2:

[Ice Cold]

yup power up sucks

did they steal it from duracell? next!

they need a catch phrase thats says cell phones

iphones is already taking "hello"
verizon "can you hear me now"

i say combine them

"Hello can you hear me" woman smiles "yes i can" announcer voice Sprint the fewest dropped calls of any network.
cue new Sprint gingle
bring back the guy in a trench coat hipper darker and now with 6pm nights boom fade out.



pretext that with people on verizon drpping calls cingular dropping call s too
and good luck getting t-mobile to complete a call.

[Wayne 1]

I forgot about duracell, yes I think they did! LOL

[Dan]

I'll wait to pass judgement when I see the Q1 07 numbers my gut says there will be around the same 300k is loss in customers

For these reasons

#1. Sprint especially Nextel is sucking badly customer services problems if reps have a hard time dealing with a 1 user 1 phone contract how do they deal with companies or small buisnesses yikes
#2. The iPhone every single OOC out of contract person will Jump for an iPhone period. This will be called the iPhone effect bye bye OOC people :wavey:
#3. Unless your on a sweet SERO plan or Retentions deal Sprint doesn't have anything intresting to offer the customer, booring plans, booring phones same prices.
#4 No cohesive tight marketing or brand loyalty no Brand identity



#1 I get great CS from sprint :)

#2 People wont be running to cingular and the iPhone in droves. The price point on the device is high enough that only the extreme technogeeks who have to have everything 1st will run to cingular for a phone.

#3 The largest voice coverage area in the USA isn't anything to offer? Data plans that cost $15 on a treo as opposed to about $40 isn't a better option? Every carrier seems to have the same pricing at this time each with a gimmic like rollover, my circle / fave 5, and the "in" network. Sprint has 7pm included, so an extra 2-3 hours of off peak time per day included. Sprints nights are 7p-7a while verizons are 9p-6a. A big difference if your looking for free calls on your drive into work or on your drive home.

#4 Sprint seems to be pushing the sprint network now with the hybrid phones. I do think they should do more advertising gimmics where you "buy one get up to 4 more free" and really push the point of their "largest network" with a couple with cingular and verizon broke down and having no luck getting a signal while a sprint customer saves the day. Something that actually shows a location that you could be at and only sprint would cover you, not cingular or verizon.


As far as customer gains or losses go.......... If sprint is losing high value customers, its far worse than losing a credit challenged SERO customer that they profit very little from :) If the losses are from weeding out credit risk customers, "the street" will look less harshly at that.

:wavey:

[Ice Cold]

#1 I get great CS from Sprint too so far, But T-Mobile is better and so is Cingular

#2. Will people stop saying the iPhone is too expensive the RAZR 3 years ago cost $400 with a 2 year contract with Cingular , it had 5MB of Memory and Cingular could not get them instock fast enought the still sell like hot cakes.
The iPhone is $100 more its an iPod great phone huge Status symbol like the RAZR was and it has 4GB of Memory it will be the fastest selling consumer item slash product in history
#3. Good points but My Circle Fav 5's Rollover are sexier catchier phrases look at the College market would they preffer 7pm nights or Unlimited calls to any of their 5 Friends Duh, from a Parents view as well Parnet says Add me as 1 of teh 5 Favs and I'll pay for your phone done deal.
#4. This is true I do get service where my Cingular or T-Mobile phone do not But you have to look at the Market and targeted Demographics

Cingular AT&T offer all in one Home Data Broadband home phone cell services long distance all under one bill many many services target famalies and a wide range
T-Mobile Fav 5 targets young adults college markets cheaper

Sprint- some government contracts, small to large busniesses but they are booring to the avergae joe on the street thats whee the real money is

Loosing customers they lost a Ton of Out of contract people which they term High value customers in return the gained a ton of low profit SERO plans

Basically so they can show "the street" they have "regained" Marketshare yeah but if you dig deeper they lost high value people for low value people but teh Marketshare is growing again or at least thats what they want people to think

[Deval]

Dan, just a lil FYI

they are offering a month trial of the IC phones, just for clients who are complaining about signal and reception.

They are working towards bringing the ship back up right, just will take some time. I think once the dual mode phones are out in full force, they will help improve the loss on the iDEN side.

I think if we look at the numbers, CDMA continues to add more clients...its really the iDEN side which is the issue.

We'll be back up and running

[Ice Cold]

iDEN is a casualty of war not even as many police depts are using them as I use to see. My brother PD dropped Nextel altogther well the City Did, And got Blackberry with AT&T but besides that

I use to see people with Nextel phones and that super loud Chirp everywhere now hardly anyone uses those junk phones anymore seriously $299 for a phone with built in GPS with a very very tiny screen.

Better off swtching carriers getting Blackberries and a better Plan people foudn out they don't go over their Minutes as much as they thought

T-Mobiles 5 Favs really put a crunch on Nextel too.

in 6 more months Sprint will dropp the Nextel name forever iDEN is bleeding customers like a plaque

Well thats what happens when you get bought out

What the Heck did Sprint actually Merge with Nextel for anyways NOT for teh Customer Base they are Leaving in Droves.

Not for the Network

Not for the ugly horribly expensive Phones

Then can anyone tell me why they Merged with Nextel for anyways ?most have left

http://www.usatoday.com/money/companies/earnings/2006-10-26-sprint-usat_x.htm

seriously 35 BILLION for What negative growth they should have bough T-Mobile

If they were to buy Nextel today all it would be worth is maybe 15 Billion what a nightmare of a deal and Signals the END for Sprint you can mark this point in history

[Dan]

They merged with nextel for the spectrum that nextel was getting in exchange for giving up frequencies near the public use bands (police, fire) that nextel was sometimes interfering with law enforcement communications.

Now they have a small 800mhz spectrum, a large 1.9ghz and a good 2.5 GHz spectrum to work with. The 800 will likely be kept for iDEN PTT use, the 1.9 GHz for CDMA voice calling and the 2.5 will be for high speed Internet and VOIP type services such as a new PTT service that "nextel" will be migrated over to. iDEN will become the area for some limited roaming use by customers of Telus in Canada and some other carriers, but will basically be used by the US Govt for homeland security needs.

With many mergers, the short term results are a muddled mess (even cingular getting ATTWS was a mess with great customer losses for about a year or so.) In the long run, with a good plan, the company will emerge as a powerful force with a robust 4G network, a PTT that will again be second to none and a great CDMA coverage with 800mhz roaming on most phones. The hybrid phones of today are just a patch for the network, and when sprint orders some with true CDMA roaming plus the ability to switch to iDEN PTT or CDMA roam they will be a great phone for the nextel customers to use.

[Dan]

Dan, just a lil FYI

they are offering a month trial of the IC phones, just for clients who are complaining about signal and reception.

They are working towards bringing the ship back up right, just will take some time. I think once the dual mode phones are out in full force, they will help improve the loss on the iDEN side.

I think if we look at the numbers, CDMA continues to add more clients...its really the iDEN side which is the issue.

We'll be back up and running


Hopefully they will push for a migration to the hybrid phones soon. Its too bad they aren't yet available in places like Buffalo as Buffalo was a Nextel Partners area. Sprint's kinda tiening one hand behind their back by still treating Nextel Partners as a seperate area even though they now own the company.


:wavey:

[PrincessPixie]

I personally am pleased with what's going in behind Sprint. Overall I think it's a step in the right direction.

I'm not going to leave a company with great coverage in my area, great perks for a long term customer, good customer service, and good phones just for the latest toy. I'm sure not everyone will be "running off in droves".

[Deval]

Hopefully they will push for a migration to the hybrid phones soon. Its too bad they aren't yet available in places like Buffalo as Buffalo was a Nextel Partners area. Sprint's kinda tiening one hand behind their back by still treating Nextel Partners as a seperate area even though they now own the company.


:wavey:
this isnt really like Cingular with forced migrations...people are simply given options...and soon, there will be more of them

[Dan]

this isnt really like Cingular with forced migrations...people are simply given options...and soon, there will be more of them


Less about a forced migration and more about an "encouraged" mightarion where nextel customers are given the chance to see how the hybrid may be better for their needs. Decreased need for the iDEN network (less voice calls) would help those still on iDEN to have better luck completing calls.


Just a thought :)

:wavey:

[Deval]

Less about a forced migration and more about an "encouraged" mightarion where nextel customers are given the chance to see how the hybrid may be better for their needs. Decreased need for the iDEN network (less voice calls) would help those still on iDEN to have better luck completing calls.


Just a thought :)

:wavey:

and you don't feel/see that this is being done already?, very aggressively

[rip]

They merged with nextel for the spectrum that nextel was getting in exchange for giving up frequencies near the public use bands (police, fire) that nextel was sometimes interfering with law enforcement communications.

Now they have a small 800mhz spectrum, a large 1.9ghz and a good 2.5 GHz spectrum to work with. The 800 will likely be kept for iDEN PTT use, the 1.9 GHz for CDMA voice calling and the 2.5 will be for high speed Internet and VOIP type services such as a new PTT service that "nextel" will be migrated over to. iDEN will become the area for some limited roaming use by customers of Telus in Canada and some other carriers, but will basically be used by the US Govt for homeland security needs.

With many mergers, the short term results are a muddled mess (even cingular getting ATTWS was a mess with great customer losses for about a year or so.) In the long run, with a good plan, the company will emerge as a powerful force with a robust 4G network, a PTT that will again be second to none and a great CDMA coverage with 800mhz roaming on most phones. The hybrid phones of today are just a patch for the network, and when sprint orders some with true CDMA roaming plus the ability to switch to iDEN PTT or CDMA roam they will be a great phone for the nextel customers to use.


The spectrum Nextel had was one reason, but not "the" reason. A nationwide swath of the 700mhz spectrum is expected to run about 1/8th the cost of Nextel, 4-6 billion should cover it. Sprint and Nextel merged simply because both needed a merger to sustain life in the wireless world. Nextel had been aggressively persuing Sprint for a couple of years before the merger happened. Nextel had/has the most business customer, the most profitable in the industry. Nobody else wanted Nextel because they neither needed Nextel or wanted the perceived headaches involved. Nextel had the only PTT that actually worked well enough to satisfy wireless customers.

The headaches Sprint Nextel has had are all self induced, 100% of them, none are because of iDEN VS. CDMA. But instead are because of Sprint Nextels managements blatant screw ups, two networks under one roof can co-exist extremely well. They can also prove to be much more profitable than one. Just ask Alltel and Telus. People keep saying that iDEN is dead.....well that could not be further from the truth, iDEN as a technology is alive and well. And is even expanding here and in many other parts of the world.

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