The nation’s third-largest wireless carrier showed $7.87 billion in fourth-quarter revenue – analysts had projected $8.04 billion on average. Sprint also lost $980 million overall, but that was a smaller number than the year-ago quarter when it was in the red by $1.62 billion.
Shares of Sprint had fallen 8.9 percent to $3.32 by 11:37 a.m. Eastern as investors reacted to the provider’s disappointing results. Subscribers still left Sprint for other operators and fewer new prepaid customers signed on for Sprint-owned Boost Mobile and Virgin Mobile USA services. Sprint lost 504,000 valuable post-paid users and added 435,000 prepaid accounts. Industry observers were anticipating 626,000 new prepaid customers, according to the Wall Street Journal.
Further, Sprint customers spent less money on their monthly bills while Sprint itself pushed high-cost promotional campaigns, trying to sell devices such as the Palm Pre and touting all-you-can-eat service plans. To compensate for those expenses, Sprint has continued to cut jobs and close call centers. It added another 2,500 layoffs, including dozens in the wholesale unit, last fall.
However, there could be an end to the job losses. Sprint does not anticipate axing more positions even as it reduces spending, CFO Bob Brust told analysts on Wednesday’s earnings conference call.
“As far as we can see, that takes care of that part of our cost reduction program,” Brust said. “We don’t envision any more head-count reductions.”
In the meantime, Sprint tried to put a positive spin on its quarterly numbers.
“Sprint’s performance built notable momentum during the second half of 2009, leading to a fourth quarter with the best sequential and year-over-year improvement in net postpaid subscriber results in Sprint Nextel history, and positive postpaid net subscriber growth for services carrying the ‘Sprint’ brand,” CEO Dan Hesse said in a prepared statement.