Sprint Q2 Loss Widens On Nextel Platform Shutdown; Ups Outlook

(RTTNews) - Telecom services firm Sprint Corp. (S), which recently merged with Japan's SoftBank Corp. (SFTBF.PK, SFTBY.PK), reported Tuesday a wider loss in its second quarter, hurt by higher charges arising from the shut down of its Nextel platform. Quarterly revenues increased and beat analysts' estimates. Further, the company lifted its forecast for fiscal 2013 adjusted OIBDA, a key earnings metric.

Sprint CEO Dan Hesse said, "This is a historic time for Sprint. We recently shut down the Nextel platform and completed the Clearwire, SoftBank and U.S. Cellular transactions. In the second quarter, we achieved record levels in Sprint platform postpaid subscribers, service revenue and postpaid ARPU, and increased our 4G LTE footprint."

For the second quarter, net loss was $1.60 billion or $0.53 per share, compared to a loss of $1.37 billion or $0.46 per share, last year.

The latest-quarter results included pre-tax, accelerated depreciation of approximately $430 million and noncash charges of $623 million related to the Nextel platform shutdown. The prior-year results included pre-tax, accelerated depreciation of $782 million and non-cash charges of $184 million related to the thinning of the Nextel platform. The last-year results also were hurt by a pre-tax impairment of $204 million related to Sprint's investment in Clearwire.

Operating income before depreciation and amortization or OIBDA decreased to $758 million from $1.27 billion last year. Adjusted OIBDA, which excluded items, decreased 2 percent, primarily due to lower Nextel platform revenue, higher Network Vision dilution and slightly higher SG&A expenses offset by growth in Sprint platform service revenue. Adjusted OIBDA margin dropped to 17.7 percent from 17.9 percent a year ago.

In the quarter, net operating revenues rose to $8.88 billion, from $8.84 billion in the prior year. On average, 21 analysts polled by Thomson Reuters expected the company to report revenue of $8.69 billion for the quarter.

The company noted continued growth in Sprint platform postpaid subscribers. Of the quarterly Sprint platform postpaid handset sales, 86 percent were smartphones, including approximately 1.4 million iPhones sold during the quarter.

Total wireless net losses were 2.03 million due to the shutdown, compared to last year's additions of 283 thousand. The company's end of period subscribers were 53.59 million, lower than 56.39 million last year.

Looking ahead, Sprint now expects fiscal 2013 adjusted OIBDA, on a stand-alone basis, to be between $5.5 billion and $5.7 billion. The company's previous forecast was for adjusted OIBDA to be at the high end of $5.2 billion - $5.5 billion range. The previous forecast did not include the dilutive effects of the SoftBank and Clearwire transactions. Including these transactions, the company now expects 2013 adjusted OIBDA to be between $5.1 billion and $5.3 billion.

The company expects 2013 capital expenditures of approximately $8 billion.

Sprint shares closed Tuesday's trading at $5.74. In the after hours trading, shares lost 0.52 percent.