NEW YORK (Reuters) - Sprint Nextel (S.N) posted higher-than-expected second-quarter results on Wednesday as the No. 3 U.S. mobile service lost fewer subscribers than expected due to sales of a new phone and new service plans.
However, Sprint plans to sell 3 billion in convertible preferred stock to pay down debt, sending its shares down 9 percent. Sprint also warned that losses of valuable monthly-bill-paying customers would swell in the current quarter.
It posted a loss of 344 million, or 12 cents a share compared with a profit of 19 million, or 1 cent a share in the year ago quarter. Revenue fell 11 percent to 9.06 billion.
On an adjusted basis, excluding amortization and other items, Sprint earned 6 cents per share compared with average analyst estimates for 3 cents a share, according to Reuters Estimates.
Sprint has struggled to stem subscriber customer defections amid service problems. In the second quarter, it lost 776,000 post-paid subscribers, valuable subscribers that pay monthly bills. This compares with average estimates for a net loss of over 906,000 subscribers, according to seven analysts contacted by Reuters.
Including prepaid customers, who pay for calls in advance, Sprint said it lost 901,000 in the quarter, slightly better than its first quarter defections.
The companys customer cancellation rate had fallen to 2 percent from 2.45 percent in the first quarter.
"We are seeing signs of progress from our efforts to improve the customer experience, rebuild the Sprint brand and increase our profitability," Dan Hesse, Sprint Nextel CEO said in a statement.
He pointed to Sprints introduction of the Instinct phone from Samsung Electronics (005930.KS) and unlimited voice and data plans as key aids to reducing customer defections.
However Sprints results lagged far behind bigger rivals AT&T Inc (T.N) and Verizon Wireless, a venture of Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L).
In the same quarter Verizon Wireless had added 1.5 million customers while AT&T posted customer growth of 1.33 million.
Its shares fell to 7.76 in early trade after closing at 8.55 on the New York Stock Exchange Tuesday.
(Reporting by Sinead Carew; Editing by Derek Caney)
However, Sprint plans to sell 3 billion in convertible preferred stock to pay down debt, sending its shares down 9 percent. Sprint also warned that losses of valuable monthly-bill-paying customers would swell in the current quarter.
It posted a loss of 344 million, or 12 cents a share compared with a profit of 19 million, or 1 cent a share in the year ago quarter. Revenue fell 11 percent to 9.06 billion.
On an adjusted basis, excluding amortization and other items, Sprint earned 6 cents per share compared with average analyst estimates for 3 cents a share, according to Reuters Estimates.
Sprint has struggled to stem subscriber customer defections amid service problems. In the second quarter, it lost 776,000 post-paid subscribers, valuable subscribers that pay monthly bills. This compares with average estimates for a net loss of over 906,000 subscribers, according to seven analysts contacted by Reuters.
Including prepaid customers, who pay for calls in advance, Sprint said it lost 901,000 in the quarter, slightly better than its first quarter defections.
The companys customer cancellation rate had fallen to 2 percent from 2.45 percent in the first quarter.
"We are seeing signs of progress from our efforts to improve the customer experience, rebuild the Sprint brand and increase our profitability," Dan Hesse, Sprint Nextel CEO said in a statement.
He pointed to Sprints introduction of the Instinct phone from Samsung Electronics (005930.KS) and unlimited voice and data plans as key aids to reducing customer defections.
However Sprints results lagged far behind bigger rivals AT&T Inc (T.N) and Verizon Wireless, a venture of Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L).
In the same quarter Verizon Wireless had added 1.5 million customers while AT&T posted customer growth of 1.33 million.
Its shares fell to 7.76 in early trade after closing at 8.55 on the New York Stock Exchange Tuesday.
(Reporting by Sinead Carew; Editing by Derek Caney)
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