Sprint posts higher revenues, but struggles with loss from Nextel

Sprint, which announced its financial results Wednesday during a conference call with investors, brought in $10.4 billion in revenue during the quarter, compared to $9.8 billion during the fourth quarter of 2005.

It earned $261 million in profits for the quarter, up from a profit of $195 million during the same period last year.

Sprint added 742,000 net subscribers, bringing its total to 53.1 million, but this included an overall loss of subscribers from Nextel, which targets largely business customers.

Sprint merged with Nextel in August 2005.

The subscribers that it lost fell largely into the category of customers paying monthly for their service.

The company announced last month that it would be cutting 5,000 jobs in response to anticipated low subscriber numbers for the quarter.

Sprint CEO Gary Forsee said during the call that the move will save the company about $400 million by the end of this year.

During 2007, Sprint wants to maintain a 2 percent churn, or customer cancellation rate, and consolidate its advertising efforts under a single agency, Forsee said.

Churn was 2.3 percent during the quarter.

Sprint also plans to deploy the first infrastructure for its Wimax wireless network in 2007, making the service available in 2008.

The Baltimore-Washington area will be one of two regions that will get the service first, Forsee said.

The company also plans to launch its joint venture with three cable companies, which delivers broadband and other services to its phones, in 40 more markets by the end of the year, he added.

Sprint may be able to add contract subscribers in the second half, helped by a more effective marketing campaign, Citigroup’s Michael Rollins wrote in a note Wednesday.

The company may become a takeover target should its restructuring efforts fail or if cable providers see the company as strategically attractive, he wrote.

Bloomberg News contributed to this report

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