Sprint Nextel reported widening losses for the third quarter despite improvements in nearly all aspects of its business.
Sprint has successfully overhauled its customer care unit, grown an impressive portfolio of smartphones, including the Palm Pre and the HTC Hero, and now offers drastically cheaper plans than other major carriers. On top of that, Sprint’s network received the Boy Genius recognition for speed and topped PC Magazine’s testing of the three major carrier networks.
Nevertheless, Sprint today announced earnings that showed a $478 million loss for the quarter. That’s compared to a $326 million loss in the year-ago quarter. Revenue for the quarter fell 9 percent to $8.04 billion.
Churn continued to be a problem for the carrier. Sprint saw a churn rate for the quarter of 2.17 percent, well above Verizon Wireless and AT&T, and higher than the 2.05 percent Sprint saw last quarter. Sprint lost a total of 135,000 net retail subscribers in the quarter, but added more subscribers than it has in quite some time.
“Sprint achieved its best net retail subscriber results in more than two years and improvement in both postpaid and prepaid gross subscriber additions in the third quarter,” stated Dan Hesse, Sprint Nextel CEO, in a press release.
Shares of Sprint continued a downward spiral, dropping more than 28 percent since the company’s last earnings call. Wall Street seems particularly worried about Sprint’s loss of the contract to provide wireless service for Amazon’s Kindle. Shares have dropped by 6 percent since it was revealed last Friday that AT&T snatched up the Kindle and its U.S. and international honors.
The company’s year-over-year postpaid gross addition improvement was the best in Sprint Nextel history, and the sequential improvement was the best in more than five years. Net postpaid subscriber losses have improved by about 20 percent in each of the second and third quarters of 2009.