Sprint Nextel Revenues Up, Profits Down

Light Reading reports that Sprint Nextel (NYSE: S) announced "a general increase in operating revenues but acquisitions costs took a bite out of its net profits for its first quarter of 2006."

According to the article, "On the wireless side, Sprint Nextel reported pro forma net operating revenues of $8.52 billion, compared with $7.52 billion a year ago. The company reported 1.3 million new wireless customers for the first quarter, 20 percent of which came from MVNOs and affiliates. Of these, 563,000 were customers who pay monthly bills, 502,000 were pay-as-you-go customers under the Boost Mobile brand, and 273,000 were wholesale customers. Sprint's average monthly revenue per user (ARPU) was $62 for post-paid customers, down 3 percent from the same quarter a year ago; $7 of that was for data services, a 54 percent increase from last year. ARPU for pre-paid customers in the quarter was $36. Post-paid churn for the quarter was 2.1 percent, meaning this was the percentage of customers who switched to other carriers during the quarter. Churn among Boost customers was 5.4 percent."

Phil Redman at Gartner said, "Sprint has been an aggressive price discounter, so it’s no surprise if their ARPU is down, leading to lower earnings."