Sprint sees net loss in Q2
In its second quarter of 2008, Sprint Nextel reported a net loss of $344 million, compared with a net income of $19 million in the prior year’s quarter.
Net operating revenues totaled $9.1 billion, compared with $10.2 billion in the second quarter of 2007 – marking a year-over-year decrease of 11 percent. And Sprint reported a diluted loss per share of 12 cents.
"We are seeing signs of progress from our efforts to improve the customer experience, rebuild the Sprint brand and increase our profitability," said Dan Hesse, Sprint Nextel CEO. "Our company-wide retention efforts, which include Simply Everything plans, our Now Network campaign and the launch of the Instinct handset are proving to be effective retention tools, particularly for high-value customers, and this is beginning to have positive impacts on churn and ARPU. Our sequential improvement in post-paid churn is the best reported by any national wireless carrier since 2004, and it equals Sprint's best-ever churn performance post-merger.
"To increase profitability, we are taking a more aggressive stance on reducing costs, including a more stringent spending review process, minimizing external labor costs, and we have streamlined our distribution channels by more than 25 percent since the beginning of 2008. Further, our disciplined customer credit and collections efforts have reduced bad debt and strengthened the credit profile of our customer base.”
Sprint had 51.9 million wireless customers at the end of the quarter, a decrease of 2.1 million compared with the 54 million wireless subscribers the company had at the end of the second quarter of 2007. In Q2 2008, Sprint’s wireless customer base decreased by 901,000.
Separately, Sprint said that it is set to offer, subject to market and other conditions, approximately three million shares of cumulative perpetual convertible preferred stock through an offering within the U.S. to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933.
The preferred stock will have a liquidation preference of $1,000 per share, for an aggregate liquidation preference of $3 billion, and will be convertible into shares of series 1 common stock of Sprint Nextel, the company said. Sprint also expects to grant the initial purchasers a 30-day option to purchase up to 450,000 shares of preferred stock.
Sprint Nextel said it intends to use the net proceeds of this offering for general corporate purposes, which may include, among other things, debt reduction.
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