Sprint reported a solid third quarter as the company added 1.3 million net subscribers including 304,000 postpaid. Dan Hesse, CEO of Sprint, said that the response to Apple's iPhone 4s has been the best in the company’s history.
The company reported a net loss of $301 million, or 10 cents a share, on revenue of $8.3 billion, up 2 percent from a year ago. Wall Street was expecting loss of 22 cents a share on revenue of $8.38 billion.
Meanwhile, Sprint added 1.3 million wireless subscribers, including 304,000 postpaid and 485,000 prepaid. Sprint also added wholesale and affiliate subscriptions of 835,000.
Sprint noted that the third quarter didn't include the iPhone, which launched Oct. 14. On the iPhone, Sprint said the device "resulted in Sprint’s best ever day of sales in retail, web and telesales" in its history.
The iPhone is expected to be among Sprint's most profitable devices, the company said. On the company's earnings conference call, Hesse recapped the iPhone's early impact. Hesse said:
Our early results of selling the iPhone for an iPhone 4S have confirmed the iPhone's ability to attract new customers. What one hopes to see from the device is a high percentage of gross adds, new customers and the revenue to Sprint. The time we have been selling this device is very short, the early results indicate the iPhone is breaking the previous Sprint record held by the Evo in terms of percentage of device buyers who are gross adds or new to Sprint in the weeks following the launch. We believe two weeks in the March is not enough time to constantly estimate gross add percentages but we plan to provide you with the estimate after the full fourth-quarter results are in. But, early indications are extremely encouraging.
Hesse compared the iPhone to a baseball team that signs a top player. The aim is to fill the seats.
However, the third quarter was driven by Android devices from Samsung and Motorola as well as new BlackBerry devices.
By the numbers for the third quarter:
Sprint's third quarter capital expenses were $760 million, up from $462 million a year ago and $640 million in the second quarter. Sprint said it invested in additional data capacity.
The company had 53 million subscribers at the end of the third quarter, including 32.9 million postpaid.
Sprint lost 44,000 net postpaid subscribers, an improvement from a year ago.
Churn was 1.91 percent, an improvement from 1.93 percent a year ago. Prepaid churn was 4.07 percent.
Wireless revenue was $6.8 billion, up 7 percent from a year ago.
As for the outlook, Sprint only said that it will improve net wireless subscriber additions in 2011. Capital spending will be $3 billion, a sum that's on par with guidance from the previous quarter.