Sprint Earnings Down, Churn Up

Sprint Nextel Corp.’s (NYSE: S) third-quarter earnings and revenue fell sharply as the company’s wireless subscriber base declined sharply, the company reported today.

Sprint’s net income in the quarter was $64 million, or 2 cents diluted earnings per share, which compares to $279 million, or 9 cents diluted earnings per share, in the year-ago period. Adjusted EPS before amortization, which removes the effects of special items and merger-related amortization costs, was 23 cents in the quarter compared to 32 cents in the same period in 2006. Consolidated net operating revenues in the quarter were $10 billion compared to $10.5 billion in the year-ago third quarter.

The company reported a net decline of 60,000 total wireless subscribers in the third quarter, which analysts had forecast because the company doesn’t have as complete a product set as some of its competitors, who have more developed “triple play” offerings.

In the quarter, Sprint said its post-paid customer churn was 2.3 percent on seasonally higher involuntary deactivations and competitive market conditions. Churn refers to customers that don’t renew.

Overall subscriber results include growth from such technologies as CDMA post-paid, the new Boost Unlimited service, and wholesale and affiliate channels. These gains were offset by declines from iDEN post-paid and traditional Boost pre-paid product lines.

“Our third quarter results reflect mixed performance as we address competitive market conditions and manage through credit market impacts on a portion of our customer base," Paul Saleh, acting CEO and chief financial officer of Sprint Nextel, said in prepared remarks.