Business

Sprint shares jump on better revenues, but customer growth slows

Shares of Sprint Nextel Corp. jumped more than 13 percent following its second-quarter earnings report this morning.

The stock gained 47 cents to $3.84 as analysts focused on an increase in Sprint’s revenues. The Overland Park-based company also posted weak customer gains and big financial write downs.

Revenues continued their climb, reaching $8.84 billion in the quarter, a 6 percent increase from a year ago.

The wireless carrier said it added only 283,000 new subscribers in April, May and June. It ended a string of quarters in which Sprint had added more than 1 million subscribers. It has 56.4 million subscribers.

Losses jumped to $1.4 billion, or 46 cents a share, the highest quarterly hit in more than three years. A year ago, losses in the quarter totaled $847 million, or 28 cents a share.

The company said more than half the loss reflected large accounting charges related to its Network Vision upgrade, is ongoing shutdown of the Nextel network and its investment in Clearwire Corp. that runs the WiMax network some Sprint customers use.

Average revenues from most customers increased and led Sprint to bump up its forecast of one financial measure, it’s adjusted operating income before interest, depreciation and amortization.

Second quarter iPhone sales totaled 1.5 million, with 40 percent of the buyers representing new customers under contract. The new-customer rate is in line with earlier quarters.

Sprint said it is hanging on to more of the Nextel customers leaving that network ahead of a planned shutdown next year. About 60 percent are switching to Sprint’s own network, up from 46 percent of Nextel customers who moved to Sprint in the first quarter.

  Comments