Sprint reported higher revenue, earnings and free cash flow driven by wireless customer growth. Some highlights:
- Sprint Wireless posted year-over-year revenue growth of 17% and reported a 19% increase in Adjusted EBITDA.
- Wireless ARPU was $62, a modest increase over both the year-ago period and the first quarter.
- PCS also continued to achieve solid subscriber gains with the total base increasing by 897,000 subscribers in the quarter. The subscriber gains included 505,000 direct additions and 392,000 additions from our wholesale and affiliate partners. Sprint also acquired 91,000 subscribers from an affiliate during the quarter. This acquisition is not reflected in either direct or affiliate additions.
- Wireless churn was 2.3% this quarter compared to 2.4% a year ago, and 2.9% in the first quarter of 2004.
- At the end of the period, nearly 6.9 million subscribers were using Sprint PCS data services, including five million Sprint PCS Vision subscribers. For the full quarter, data contributed over 7% to overall ARPU.
- Sprint local reported steady revenues. The company continues to expand its DSL footprint and now more than 5 million of its 7.8 million local access lines now DSL ready.
- Sprint local added 34,000 new DSL customers in the quarter and ended the period with a total base of 383,000.
- Sprint local total access lines declined 2.4% from the year-ago period. At quarter end, 54% of Local's residential customers were also using Sprint long-distance services and 45% were enrolled for a premium package of vertical services.
- Sprint long distance reported a revenue decline of 7%, which is again expected to be well below the rate of decline reported by other backbone competitors. Although Long distance profitability was impacted by pricing pressures in the quarter, Adjusted EBITDA* exceeded capital spending by more than $190 million and year-to-date the excess is nearly $480 million.
- In the quarter, total voice revenues decreased 6% from the year-ago period and 2% sequentially. Compared to the year-ago period, consumer voice revenues declined 15%, while business voice revenues, including wholesale and affiliates, declined by 4%. The decline in consumer is mainly driven by lower volumes, while the business decline is due to lower pricing.
- Data revenues decreased 6% from the second quarter of 2003 and 3% sequentially. In the quarter, Frame Relay and Private Line services declined compared to both the year-ago period and sequentially, while ATM and Managed network services increased. In the quarter, dedicated IP revenues were flat year-over-year and declined 4% from the first quarter. Overall IP revenues continue to be impacted by declining dial IP usage and Sprint's exit from the Web Hosting business.
- Sprint's overall net operating revenues were $6.869 billion, up by 6.3% compared with $6.463 billion for the same period last year.
- Fully diluted earnings per share on a GAAP basis were 16 cents versus break- even earnings in the second quarter of 2003.
- Free cash flow totaled $692 million and year-to-date free cash flow is $934 million.
