When you're losing customers and losing money quarter after quarter after quarter, you have to play up the positives when you can to make sure that the investors and customers who are still around know that your turnaround strategy is working.
Today, as Sprint Nextel reports another quarter of financial losses and fewer subscribers, the company is spinning its message to focus on the coming of 4G WiMax and a beefed-up smartphone lineup.
For the first quarter, Sprint reported a net loss of $865 million, or a loss per share of 29 cents, compared to a loss of $594 million, or 21 cents per share, for the same quarter a year ago. Revenue was just shy of $8.1 billion, down about 2 percent from the $8.2 billion reported a year ago. Wall Street analysts had been expecting a loss of 17 cents on sales of $8.05 billion. (Statement)
On the customer count side, the company reported a net loss of 75,000 customers, an improvement from the 182,000 net customer loss in the year-ago quarter. But that figure paints a somewhat cloudy picture when you consider that it's boosted by the less-lucrative pre-paid customer base, which grew by 348,000 customers.
Still, the company lost 578,000 postpaid customers, those who are in contract and pay monthly bills. That's an improvement from the 1.25 million postpaid customers it lost a year ago. But, on the downside, those that are sticking around are paying less, on average, than they did previously - thanks to flat-rate pricing plans that Sprint used to lure folks back.
With all that said, the overall picture shows that Sprint is on the upswing. In a statement, Sprint Nextel CEO Dan Hesse said:
Sprint's first quarter results, including increased net operating revenues and significant year-over-year net post-paid subscriber improvements show we continue to make progress in improving the business... Our ongoing focus on improving the customer experience, generating cash and strengthening the brand continues to pay off. Customer satisfaction has improved for the ninth consecutive quarter and we generated more than $500 million in Free Cash Flow. The January launch of the award-winning and critically acclaimed Sprint Overdrive 3G/4G Mobile Hotspot, the upcoming launch of the world's first 3G/4G Android handset, HTC EVO 4G, and the introduction of the industry's first true money-back guarantee demonstrate Sprint's innovation.
On a conference call with analysts, Hesse said that performance metrics showed an upward trajectory for Sprint. The push into 4G is moving along, currently reaching 40 million people in 28 markets. Sprint's 4G partner, Clearwire, has said it expects to reach 120 million people by the end of 2010, with deployments planned for Boston, New York, San Francisco, Kansas City and Washington D.C.
Likewise, Sprint is also beefing up its smartphone offerings by adding Android devices to the lineup of Blackberry and Palm devices.