Sprint Nextel Announces Quarterly Financials (7/26/12)
Sprint Nextel reported a net loss of $1.4 billion for the second quarter of 2012 compared with a net loss of $847 million in the second quarter of 2011.
Sprint’s second quarter 2012 results include accelerated depreciation of $782 million, primarily related to Network Vision, including the expected shutdown of the Nextel platform; $184 million for the recognition of lease exit costs for the remaining lease obligations associated with certain Nextel sites shutdown; and an impairment of $204 million related to Sprint’s investment in Clearwire.
The company reported wireless service revenues of $7.3 billion during the quarter, an increase of more than 8 percent year-over-year, driven primarily by Sprint platform postpaid average revenue per user (ARPU) growth of $4.31.
Sprint platform postpaid net additions of 442,000 improved by 68 percent sequentially driven by the best-ever quarterly churn performance of 1.69 percent, a Nextel postpaid recapture rate of 60 percent and the continued strength of iPhone sales. Sprint recorded nearly 1.5 million iPhone sales in the second quarter with 40 percent going to new postpaid customers.
Sprint has taken 9,600 Nextel sites off air to date — earlier than previous guidance. To date, the company completed leasing agreements for more than 12,700 Network Vision sites and zoning requirements are completed for nearly 13,900 sites. In addition, nearly 6,300 sites are either ready for construction or under way, and more than 2,000 sites are on air and meeting speed and coverage enhancement targets. Sprint expects to bring 12,000 sites on air by the end of 2012 and to complete the majority of its Network Vision rollout by the end of 2013. Sprint launched 4G Long Term Evolution (LTE) service in five major markets and 15 cities on July 15 including Houston, Dallas, San Antonio, Atlanta and Kansas City.
During the second quarter, Sprint entered into a new $1 billion secured credit facility contingent on equipment-related purchases from Ericsson for Network Vision with a cost of funding of about 6 percent based on expected drawdowns.
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