By Scott Moritz
Feb. 8 (Bloomberg) -- Sprint Nextel Corp., the third- largest U.S. wireless carrier, reported a wider fourth-quarter loss after demand for Apple Inc.’s iPhone boosted costs to subsidize the device.
The net loss expanded to $1.3 billion, or 43 cents a share, from $929 million, or 31 cents, a year earlier, the Overland Park, Kansas-based carrier said today in a statement. The company said it had one-time costs of 8 cents a share from revaluing assets. Analysts predicted a loss of 38 cents, the average of estimates compiled by Bloomberg.
Sprint sold 1.8 million iPhones in the period, the first quarter of sales for the device the carrier is betting on to lure users and rebound from five years of losses. Sprint and larger rivals AT&T Inc. and Verizon Wireless buy iPhones from Cupertino, California-based Apple and then sell them at a loss to get consumers to sign up for multiyear contracts.
“The financials are weak due to the amount of money they are sending to Cupertino,” James Ratcliffe, an analyst at Barclays Capital, said before the report. “This year and next are going to be unattractive financially. I think people who own Sprint might be looking more toward the prospects in 2014.”
UBS AG predicted Sprint would sell 1.9 million iPhones. Verizon Wireless, the biggest U.S. wireless carrier, sold 4.3 million iPhones last quarter and AT&T activated 7.6 million of the devices.
Sprint fell 0.4 percent to $2.45 yesterday. It lost 45 percent last year, while Verizon and AT&T advanced.
Subscriber Gains
Sales rose 5.1 percent to $8.72 billion. Analysts estimated $8.7 billion. The average revenue per contract user, excluding prepaid numbers, rose to $58.59, compared with an average of $58.11 estimated by six analysts surveyed by Bloomberg.
Sprint added 161,000 contract subscribers, compared with the 211,000 average analyst estimate. The monthly defection rate, or churn, of contract customers was 1.98 percent. Analysts predicted 1.89 percent.
Last month, Sprint said it would combine its business and consumer divisions into one operation. As a result eight top management positions consolidated into four, and the company said four executives are leaving.
To compete with AT&T and Verizon, Sprint is building a higher-speed network using the same technology the larger rivals have. It has also agreed to work with billionaire Philip Falcone’s wireless-network venture LightSquared Inc.
Last week, Sprint extended a deadline it had given LightSquared to gain regulatory approval for its service, a condition of the companies’ agreement, until mid-March. Under the deal, Sprint would build and operate LightSquared’s so- called fourth-generation network during an 11-year period in exchange for $9 billion in payments and an additional $4.5 billion in service credits.
LightSquared is awaiting clearance from the Federal Communications Commission as regulators weigh test results that show the service’s signals disrupt global-positioning system equipment used by cars, tractors, boats and planes.
--Editor: Ville Heiskanen
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