Sprint Nextel Reports Second Quarter 2010 Results
Grew total wireless subscribers by 111,000 with best ever postpaid churn
* Delivered positive net postpaid subscriber growth on the CDMA network and for the Sprint brand; best ever year-over-year improvement in net postpaid subscriber results
* Achieved tenth consecutive quarter of improvement in Customer Care Satisfaction and First Call Resolution; recognized by American Customer Satisfaction Index as most improved company in customer satisfaction, across all industries, in the last two years
* Generated consolidated Adjusted OIBDA* of $1.5 billion in the quarter; maintained strong liquidity with a cash and cash equivalents balance of $4.3 billion after retiring all 2010 note maturities; year-to-date Free Cash Flow* of $1.2 billion
The company's second quarter earnings conference call will be held at 8 a.m. EDT today.Participants may dial 800-938-1120 in the U.S. or Canada (706-634-7849 internationally) and provide the following ID: 84971063, or may listen via the Internet at www.sprint.com/investor.
OVERLAND PARK, Kan., Jul 28, 2010 (BUSINESS WIRE) --
Sprint Nextel Corp. (NYSE: S) today reported that during the second quarter of 2010, the company achieved its first total net wireless subscriber growth in three years and its best postpaid churn result ever.
Sprint announced second quarter consolidated net operating revenues of approximately $8.0 billion, a net loss of $760 million and a diluted loss per share of 25 cents, which includes a non-cash $302 million (10-cent-per-share charge) increase in valuation allowance on deferred tax assets resulting from net operating loss carryforwards generated during the second quarter, for a pro forma diluted loss per share of 15 cents. The company generated $709 million of Free Cash Flow* in the quarter, and maintained a strong liquidity position with approximately $4.3 billion in cash and cash equivalents at the end of the quarter after retiring all 2010 note maturities of $750 million in the quarter.
"Our intense focus for the past ten quarters on improving the customer experience, strengthening our brands, and generating cash are paying off," said Dan Hesse, Sprint Nextel CEO. "With strong cash flow, stable OIBDA and widespread third-party recognition for the improvements we're making in the customer experience, which in turn strengthens our brands, we feel we can confidently improve our subscriber forecasts for the second half of 2010 and deliver positive total net wireless subscriber additions for the remainder of the year."
Evidence of the company's momentum in customer satisfaction has come from a variety of sources. With accolades from American Customer Satisfaction Index, Gartner, Forrester, and Frost & Sullivan, Sprint's significant improvements in customer service are being recognized.
Sprint gained a total of approximately 111,000 net subscribers in the quarter. Demand for smartphones like HTC EVO(TM) 4G and BlackBerry(R) Curve(TM) - combined with Sprint's best ever postpaid churn of 1.85 percent - led to positive net postpaid subscriber growth of 136,000 on the CDMA network and 285,000 for the Sprint brand, and best ever year-over-year quarterly net postpaid subscriber loss improvement of 763,000. The company achieved its best year-over-year quarterly improvement in postpaid gross subscriber additions in more than five years.
"I also want to underscore the importance of the prepaid business. We re-launched the Virgin Mobile brand, introduced Common CentsSM Mobile in about 700 Walmart stores this quarter, and we are encouraged by the customer response to Assurance WirelessSM, our government-subsidized program for qualified customers who need reliable wireless service," Hesse said.
As part of the re-launch of the Virgin Mobile brand to serve data-centric customers, Sprint introduced the brand's first smartphone, BlackBerry(R) Curve(TM) 8530, and its first touchscreen handset, LG Rumor Touch. The Virgin Mobile brand will continue to focus on more sophisticated handsets to complement its Beyond Talk plans. Further enhancing the Virgin Mobile brand's prepaid Broadband2GoSM product, Sprint introduced MiFi(TM) 2200, a USB device which allows customers to link up to 5 wireless devices.
The world's first 3G/4G Android(TM) phone, HTC EVO(TM) 4G, became available in June. Sprint's second 4G-capable handset, the Samsung Epic(TM) 4G, was recently announced as the only Galaxy S(TM) phone to offer 4G as well as a slide-out QWERTY keyboard. Sprint extended its green leadership in the wireless industry by introducing eco-friendly devices LG Remarq(TM) and Samsung Restore(TM). In addition, Samsung Seek(TM) debuted as a messaging device with first-of-its-kind reusable packaging. For push-to-talk customers, Sprint launched Motorola i1, a Nextel Direct Connect(R) Android(TM) smartphone.
Sprint launched 4G service in eight new markets during the quarter, including its hometown, Kansas City. Sprint 4G is now available in 43 markets serving approximately 51 million people. As previously announced by Clearwire Corp. (NASDAQ: CLWR), coverage is expected to reach up to 120 million people by the end of 2010 including deployments in Boston, New York, San Francisco and Washington, D.C.
CONSOLIDATED RESULTS
TABLE NO. 1 Selected Unaudited Financial Data (dollars in millions, except per share data)
Quarter To Date Year To Date
June 30, June 30, % June 30, June 30, %
Financial Data 2010 2009
â^
2010 2009
â^
Net operating revenues $ 8,025 $ 8,141 (1 ) % $ 16,110 $ 16,350 (1 ) %
Adjusted OIBDA* 1,501 1,769 (15 ) % 2,979 3,492 (15 ) %
Adjusted OIBDA margin* 20.1 % 23.1 % 19.9 % 22.7 %
Net loss (a) (760 ) (384 ) (98 ) % (1,625 ) (978 ) (66 ) %
Diluted loss per common share (a) $ (0.25 ) $ (0.13 ) (92 ) % $ (0.54 ) $ (0.34 ) (59 ) %
Capital Expenditures (1) $ 437 $ 321 36 % $ 856 $ 612 40 %
Free Cash Flow* $ 709 $ 676 5 % $ 1,215 $ 1,472 (17 ) %
(a) Results include a non-cash $302 million ($.10 per share) and $667 million ($.22 per share) increase in valuation allowance on deferred tax assets resulting from net operating loss carryforwards generated during the second quarter and year-to-date periods 2010, respectively.
* Consolidated net operating revenues of $8.0 billion for the quarter were approximately 1 percent lower than in the second quarter of 2009 and the first quarter of 2010. The year-over-year decline is primarily due to lower postpaid wireless service revenues and wireline revenues, partially offset by increases from fourth quarter 2009 acquisitions, prepaid Boost service revenues and total equipment revenues. The sequential decline is primarily due to lower postpaid wireless service revenues and wireline revenues.
* Adjusted OIBDA* was $1.5 billion for the quarter, compared to $1.8 billion for the second quarter of 2009 and $1.5 billion for the first quarter of 2010. The year-over-year decline in Adjusted OIBDA* was primarily due to lower postpaid wireless service and wireline revenues and higher subsidy costs resulting from improvement in retail subscriber gross additions, as well as a greater mix of postpaid smartphones sold, which on average carry a higher subsidy rate. Sequentially, Adjusted OIBDA* remained relatively flat as continued improvement in SG&A expenses offset the decline in net operating revenues.
* Capital expenditures were $437 million in the quarter, compared to $321 million in the second quarter of 2009 and $419 million in the first quarter of 2010. Wireless capital expenditures were $319 million in the second quarter of 2010, compared to $227 million in the second quarter of 2009 and $311 million in the first quarter of 2010. During the quarter, the company invested in coverage and data capacity to maintain a competitive position in mobile broadband and overall network quality. Wireline capital expenditures were $49 million in the second quarter of 2010, compared to $47 million in the second quarter of 2009 and $56 million in the first quarter of 2010.
* Free Cash Flow* was$709 million for the quarter, compared to $676 million for the second quarter of 2009 and $506 million for the first quarter of 2010. In June, the company repaid $750 million of floating rate notes, as scheduled. There are no additional note maturities during 2010.
Click to read the full press release
* Delivered positive net postpaid subscriber growth on the CDMA network and for the Sprint brand; best ever year-over-year improvement in net postpaid subscriber results
* Achieved tenth consecutive quarter of improvement in Customer Care Satisfaction and First Call Resolution; recognized by American Customer Satisfaction Index as most improved company in customer satisfaction, across all industries, in the last two years
* Generated consolidated Adjusted OIBDA* of $1.5 billion in the quarter; maintained strong liquidity with a cash and cash equivalents balance of $4.3 billion after retiring all 2010 note maturities; year-to-date Free Cash Flow* of $1.2 billion
The company's second quarter earnings conference call will be held at 8 a.m. EDT today.Participants may dial 800-938-1120 in the U.S. or Canada (706-634-7849 internationally) and provide the following ID: 84971063, or may listen via the Internet at www.sprint.com/investor.
OVERLAND PARK, Kan., Jul 28, 2010 (BUSINESS WIRE) --
Sprint Nextel Corp. (NYSE: S) today reported that during the second quarter of 2010, the company achieved its first total net wireless subscriber growth in three years and its best postpaid churn result ever.
Sprint announced second quarter consolidated net operating revenues of approximately $8.0 billion, a net loss of $760 million and a diluted loss per share of 25 cents, which includes a non-cash $302 million (10-cent-per-share charge) increase in valuation allowance on deferred tax assets resulting from net operating loss carryforwards generated during the second quarter, for a pro forma diluted loss per share of 15 cents. The company generated $709 million of Free Cash Flow* in the quarter, and maintained a strong liquidity position with approximately $4.3 billion in cash and cash equivalents at the end of the quarter after retiring all 2010 note maturities of $750 million in the quarter.
"Our intense focus for the past ten quarters on improving the customer experience, strengthening our brands, and generating cash are paying off," said Dan Hesse, Sprint Nextel CEO. "With strong cash flow, stable OIBDA and widespread third-party recognition for the improvements we're making in the customer experience, which in turn strengthens our brands, we feel we can confidently improve our subscriber forecasts for the second half of 2010 and deliver positive total net wireless subscriber additions for the remainder of the year."
Evidence of the company's momentum in customer satisfaction has come from a variety of sources. With accolades from American Customer Satisfaction Index, Gartner, Forrester, and Frost & Sullivan, Sprint's significant improvements in customer service are being recognized.
Sprint gained a total of approximately 111,000 net subscribers in the quarter. Demand for smartphones like HTC EVO(TM) 4G and BlackBerry(R) Curve(TM) - combined with Sprint's best ever postpaid churn of 1.85 percent - led to positive net postpaid subscriber growth of 136,000 on the CDMA network and 285,000 for the Sprint brand, and best ever year-over-year quarterly net postpaid subscriber loss improvement of 763,000. The company achieved its best year-over-year quarterly improvement in postpaid gross subscriber additions in more than five years.
"I also want to underscore the importance of the prepaid business. We re-launched the Virgin Mobile brand, introduced Common CentsSM Mobile in about 700 Walmart stores this quarter, and we are encouraged by the customer response to Assurance WirelessSM, our government-subsidized program for qualified customers who need reliable wireless service," Hesse said.
As part of the re-launch of the Virgin Mobile brand to serve data-centric customers, Sprint introduced the brand's first smartphone, BlackBerry(R) Curve(TM) 8530, and its first touchscreen handset, LG Rumor Touch. The Virgin Mobile brand will continue to focus on more sophisticated handsets to complement its Beyond Talk plans. Further enhancing the Virgin Mobile brand's prepaid Broadband2GoSM product, Sprint introduced MiFi(TM) 2200, a USB device which allows customers to link up to 5 wireless devices.
The world's first 3G/4G Android(TM) phone, HTC EVO(TM) 4G, became available in June. Sprint's second 4G-capable handset, the Samsung Epic(TM) 4G, was recently announced as the only Galaxy S(TM) phone to offer 4G as well as a slide-out QWERTY keyboard. Sprint extended its green leadership in the wireless industry by introducing eco-friendly devices LG Remarq(TM) and Samsung Restore(TM). In addition, Samsung Seek(TM) debuted as a messaging device with first-of-its-kind reusable packaging. For push-to-talk customers, Sprint launched Motorola i1, a Nextel Direct Connect(R) Android(TM) smartphone.
Sprint launched 4G service in eight new markets during the quarter, including its hometown, Kansas City. Sprint 4G is now available in 43 markets serving approximately 51 million people. As previously announced by Clearwire Corp. (NASDAQ: CLWR), coverage is expected to reach up to 120 million people by the end of 2010 including deployments in Boston, New York, San Francisco and Washington, D.C.
CONSOLIDATED RESULTS
TABLE NO. 1 Selected Unaudited Financial Data (dollars in millions, except per share data)
Quarter To Date Year To Date
June 30, June 30, % June 30, June 30, %
Financial Data 2010 2009
â^
2010 2009
â^
Net operating revenues $ 8,025 $ 8,141 (1 ) % $ 16,110 $ 16,350 (1 ) %
Adjusted OIBDA* 1,501 1,769 (15 ) % 2,979 3,492 (15 ) %
Adjusted OIBDA margin* 20.1 % 23.1 % 19.9 % 22.7 %
Net loss (a) (760 ) (384 ) (98 ) % (1,625 ) (978 ) (66 ) %
Diluted loss per common share (a) $ (0.25 ) $ (0.13 ) (92 ) % $ (0.54 ) $ (0.34 ) (59 ) %
Capital Expenditures (1) $ 437 $ 321 36 % $ 856 $ 612 40 %
Free Cash Flow* $ 709 $ 676 5 % $ 1,215 $ 1,472 (17 ) %
(a) Results include a non-cash $302 million ($.10 per share) and $667 million ($.22 per share) increase in valuation allowance on deferred tax assets resulting from net operating loss carryforwards generated during the second quarter and year-to-date periods 2010, respectively.
* Consolidated net operating revenues of $8.0 billion for the quarter were approximately 1 percent lower than in the second quarter of 2009 and the first quarter of 2010. The year-over-year decline is primarily due to lower postpaid wireless service revenues and wireline revenues, partially offset by increases from fourth quarter 2009 acquisitions, prepaid Boost service revenues and total equipment revenues. The sequential decline is primarily due to lower postpaid wireless service revenues and wireline revenues.
* Adjusted OIBDA* was $1.5 billion for the quarter, compared to $1.8 billion for the second quarter of 2009 and $1.5 billion for the first quarter of 2010. The year-over-year decline in Adjusted OIBDA* was primarily due to lower postpaid wireless service and wireline revenues and higher subsidy costs resulting from improvement in retail subscriber gross additions, as well as a greater mix of postpaid smartphones sold, which on average carry a higher subsidy rate. Sequentially, Adjusted OIBDA* remained relatively flat as continued improvement in SG&A expenses offset the decline in net operating revenues.
* Capital expenditures were $437 million in the quarter, compared to $321 million in the second quarter of 2009 and $419 million in the first quarter of 2010. Wireless capital expenditures were $319 million in the second quarter of 2010, compared to $227 million in the second quarter of 2009 and $311 million in the first quarter of 2010. During the quarter, the company invested in coverage and data capacity to maintain a competitive position in mobile broadband and overall network quality. Wireline capital expenditures were $49 million in the second quarter of 2010, compared to $47 million in the second quarter of 2009 and $56 million in the first quarter of 2010.
* Free Cash Flow* was$709 million for the quarter, compared to $676 million for the second quarter of 2009 and $506 million for the first quarter of 2010. In June, the company repaid $750 million of floating rate notes, as scheduled. There are no additional note maturities during 2010.
Click to read the full press release
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