Citing strong demand for its communications services, Sprint Nextel reported consolidated revenue of $11.5 billion, an increase of 66 percent compared to the year-ago period. Operating income was $863 million versus $1.04 billion in the first quarter of 2005.
For the quarter, diluted earnings per share were 14 cents, compared to 31 cents per share for the first quarter of 2005. The year-ago results do not include the Nextel operations.
"In the first quarter, we continued to advance on our operating and strategic goals and integrate the affiliates we have acquired," said Gary Forsee, Sprint Nextel president and chief executive officer. "Our performance in the quarter was marked by balanced growth in Wireless and we achieved good velocity on Long Distance IP and Local DSL services. With an expected ramp-up in merger synergies during the balance of 2006, we continue to maintain our financial outlook for full year performance," he said.
Some highlights:
- In the first quarter, Wireless added 1.3 million net subscribers including 563,000 under the Sprint and Nextel post-paid brands, 502,000 under the Boost Mobile brand and 273,000 through wholesale channels and from Sprint PCS affiliates. Approximately 1.6 million subscribers were transferred from affiliates to the direct category as a result of acquisitions completed in the quarter.
- For the quarter, total retail gross additions were 4.1 million, compared to 3.6 million in the first quarter of 2005 and 4.0 million in the fourth quarter.
- Post-paid churn of 2.1 percent in the quarter was consistent with the year-ago period and the fourth quarter. Normalized Boost Mobile churn in the quarter was 5.4 percent.
- Service revenues increased 13 percent, due to a larger customer base, which was partially offset by lower average revenue per user (ARPU).
- Direct post-paid ARPU of a little over $62 in the quarter declined 3 percent, compared to the year-ago period. The decline was 1 percent sequentially.
- Wireless capital expenditures were $1.1 billion. Spending was mainly focused on improving network quality, expanding capacity and expanding the mobile broadband footprint. Capital spending is expected to ramp up over the course of the year.
- In long distance, voice revenues declined 5 percent compared to the year-ago period but were flat sequentially. Compared to the year-ago period, contract renewals pressured business retail voice revenues, which were partially offset by higher wholesale services and a growing contribution from cable partners.
- Sprint Nextel was providing cable telephony wireline services to seven cable companies with a total of more than 1.02 million cable telephony subscribers, a 24 percent gain from the end of 2005.
- Internet revenues were up 17 percent sequentially, due to strong demand for Dedicated IP and MPLS. This was partially offset by reduced ATM and Frame Relay revenues.
