Sprint Nextel Corporation (NYSE:S) posted its earnings report before opening bell on Thursday, reporting heavy losses on the Nextel side. However those losses were not unexpected. In fact, the report was actually better than expected. Meanwhile Sprint is awaiting the cash infusion that will come if federal regulators approve the merger of Sprint and the Japanese company Softbank Corp (PINK:SFTBF).
Today’s earnings report from Sprint indicated $1.32 billion in losses, which amounts to 44 cents per share. A consensus of Thomson Reuters analysts indicated an expectation of 46 cents per share in loss. Last year the company’s losses were $1.3 billion or 43 cents per share. However the company’s revenue did increase to $9 billion.
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Sprint attributed the losses to the droves of Nextel customers who are leaving. Over 1 million Nextel customers canceled their service, erasing the gains the company made on the Sprint side. The company has a whole reported the loss of 337,000 net customers. Sprint Nextel Corporation (NYSE:S) was able to take about half of its defecting Nextel customers and turn them into customers on the Sprint side of the business.
Aside from the loss of Nextel customers, Sprint Nextel Corporation (NYSE:S) also reported problems with the high subsidies from Apple Inc. (NASDAQ:AAPL)’s iPhone 5. Sprint reported sales of over 2 million iPhones, and for each iPhone sold, it paid a subsidy to Apple so that its customers could pay just $200 for the phone.
Sprint Nextel Corporation (NYSE:S) also had to deal with recovery costs from Hurricane Sandy during the fourth quarter. It reported a $45 million charge attributed to repair costs and blackout time due to the storm.
The company’s fourth quarter earnings report left its stock largely unaffected. Pre-market trades on shares of Sprint Nextel Corporation (NYSE:S) were mostly flat.