Shares of Sprint Nextel Corp. rose Thursday after wireless service revenues shot up 8 percent in the second quarter to $7.3 billion over the year-earlier period.
Sprint, the nation’s third-largest wireless carrier, reported that its branded postpaid average revenue per user grew by $4.31 in what the company claimed reflects “the largest quarterly year-over-year increase on record for the U.S. wireless industry.” Sprint reported postpaid ARPU of $63.38.
The stock increased 13.95 percent, or 47 cents, in late morning trading on the New York Stock Exchange.
“It was a solid quarter,” Kevin Smithen, an analyst at Macquarie Securities USA Inc in New York, told Bloomberg. He said the results show the carrier was smart to obtain the iPhone despite the costs to do so. “People will question why they got the iPhone. Now they have the answer,” Bloomberg quoted the analyst.
In the quarter, Sprint sold nearly 1.5 million iPhones with nearly 40 percent purchased by new contract customers.
Churn, representing customers who leave, was a record low 1.69 percent for postpaid customers on Sprint’s platform.
Still, the results were far from entirely rosy. Sprint disclosed its net loss grew from $847 million in the year-earlier quarter to $1.4 billion.
The company continues to lose hundreds of thousand of customers on its Nextel platform amid its plans to shut it down. However, of the 688,000 postpaid customers lost on the Nextel platform, However, 431,000 Nextel customers moved over to Sprint’s platform.
Sprint, based in Overland Park, Kan., ended the month of June with 56.4 million subscribers, including 32.6 million postpaid subscribers.