Sprint shares down; Clearwire’s up
Sprint Nextel managed to achieve its best total company wireless net subscriber additions in five years, yet its shares were trading down more than 6 percent at one point this morning after it reported third-quarter results.
Clearwire shares, on the other hand, were up more than 22 percent after Sprint CEO Dan Hesse said Sprint has agreed to work closely with Clearwire in its planned LTE rollout.
In the third quarter, Sprint added nearly 1.3 million total net wireless subscribers, primarily driven by 304,000 net postpaid additions for the Sprint brand, net prepaid additions of 485,000, and net wholesale and affiliate additions of 835,000.
The net adds don’t reflect the addition of Apple’s iPhone 4S to Sprint’s lineup, which occurred Oct. 14. Sprint said the launch of the iPhone 4S on its network resulted in the best-ever day of sales in retail, Web and telesales for a device family in Sprint history.
Based on questions during Sprint’s conference call with analysts, Sprint’s Oct. 7 investor meeting is still on a lot of minds. “The pervasive sense that Sprint still has not articulated its real path forward arguably renders the most recent quarterly results relatively inconsequential,” wrote Bernstein Research senior analyst Craig Moffett in a research note today.
“And that's too bad … because they're actually pretty good,” Moffett wrote. “And perhaps more importantly, the first faint hints of a more credible plan are at last beginning to emerge.”
“IF (and that's a very big IF) Sprint can articulate a plausible 4G strategy, and IF they can sort out the mess with Clearwire, financing their way through the trough of 2012 and 2013 will be a lot easier … and investors might plausibly begin to focus on 2014.”
Sprint’s net loss for the quarter was $301 million, compared with a net loss of $911 million in the third quarter of last year.
The company ended the third quarter with more than 53 million customers. That includes 32.9 postpaid subscribers, 14.3 million prepaid, and about 6.3 million wholesale and affiliate subscribers.
Postpaid churn was 1.91 percent. Prepaid churn for the quarter was 4.07 percent.
Postpaid ARPU increased year-over-year from $55 to $58, the largest year-over-year postpaid ARPU growth in almost 12 years, while sequentially ARPU increased from $57 to $58. Prepaid ARPU of $27 for the quarter declined from $28 in the third quarter of 2010 and the second quarter of 2011 as a result of a greater mix of Assurance Wireless customers.
Sprint expects full-year capital expenditures in 2011, excluding capitalized interest, to be about $3 billion. The company expects free cash flow between negative $200 million and positive $100 million for 2011.