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Sprint's revenue beats estimates as price cuts draw subscribers

Published 02/05/2015, 10:04 AM
© Reuters. Sprint's Spark download rate of 1 gigabits per second is shown during a tour in Burlingame
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By Malathi Nayak and Abhirup Roy

(Reuters) - Sprint Corp's (N:S) quarterly revenue fell less than expected as the U.S. mobile provider attracted more subscribers by cutting prices and offering promotions.

Shares of the company, which is 80 percent owned by Japan's SoftBank Corp (T:9984), rose about 4 percent to $4.76 in early trading on Thursday.

Since taking on the top post at Sprint six months ago, Chief Executive Marcelo Claure has been focusing on improving subscriber metrics through offers such as cutting bills in half to switch from other carriers and improving network quality. The company has also been reducing costs, trimming staff and revamping its management.

Wireless carriers have been going after each others' subscribers with discounts and attractive plans as they try to increase revenue in a nearly saturated market. In an intensely competitive market, retaining and adding users has been a challenge for Sprint and its larger rivals, AT&T and Verizon.

Sprint said it added 892,000 total wireless subscribers in the three months ended Dec. 31, well above Wall Street analysts' estimate of 790,000.

Postpaid churn, or the rate of customer defections, rose to 2.3 percent from a year ago. Retail postpaid average revenue per user was down 7.6 percent from a year ago.

The company's net operating revenue fell 1.8 percent to $8.97 billion, but beat analysts' average estimate of $8.68 billion, according to Thomson Reuters I/B/E/S.

Sprint's net loss more than doubled to $2.38 billion, or 60 cents per share, from $1.04 billion, or 26 cents per share, a year earlier.

The latest quarter included a $2.1 billion non-cash impairment charge.

© Reuters. Sprint's Spark download rate of 1 gigabits per second is shown during a tour in Burlingame

Through Wednesday's close of $4.58 per share, Sprint's stock had dropped more than 40 percent in the past 12 months.

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