Sprint-Nextel Corp. (NYSE:S), the No. 3 telecommunications company, reported fourth-quarter results that were better than forecast for its net loss, revenue and sales of smartphones, especially the iPhone from Apple Inc. (NASDAQ:AAPL), the most valuable technology company.
But the Overland Park, Kan.-based carrier reported losing some customers, leaving its total stuck around 56 million, less than half the number of AT&T Inc. (NYSE:T), the No. 1 telecommunications carrier, and far below the 98.2 million served by the Verizon Wireless unit of Verizon Communications Inc. (NYSE:VZ), the No. 2 telecommunications carrier.
Shares of Sprint fell 3 cents to $5.74 in Thursday trading. They’ve gained 133 percent over the past year, largely because of plans by Japan’s SoftBank Corp. (TYO:9984) to acquire a 70 percent stake in the company for about $21 billion. The company’s market value now is about $17.3 billion.
Sprint reported a fourth-quarter net loss of 44 cents a share, two cents below the analyst estimates, on revenue of $9.01 billion, far ahead of the estimated $8.92 billion forecast. For the year, the net loss was $1.44 a share, two cents below the Thomson Reuters analyst estimate, on revenue of $35.4 billion, nearly $200 million ahead of estimates.
The company also estimated its performance will be better this year. Operating income before all special charges should rise to between $5.2 billion and $5.5 billion, compared with 2012’s $4.8 billion.
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“Sprint’s strong performance was fueled by record wireless service on the Sprint platform,” said CEO Dan Hesse. The key was higher average revenue per user, largely due to smartphones that require more data and bandwidth and that customers use more.
The company said it sold 2.2 million iPhones alone in the fourth quarter, 38 percent bought by new subscribers. That was only the fifth quarter that Sprint made them available, after paying Apple, of Cupertino, Calif., more than $20 billion in a five-year agreement. Sprint, like all the mobile carriers, sells iPhones and competitors far below cost, hoping to make up the difference over the duration of contracts.
Sprint said it now has sold more than 4 million 4G phones for long term evolution (LTE) service, which would benefit from the company’s majority ownership in Clearwire Corp. (NASDAQ:CLWR).
The offer is being challenged by Dish Networks Corp. (NASDA:DISH), which has offered more for the company than Sprint, which only acquired a 51 percent stake last quarter.
SoftBank, as agreed, gave Sprint $3.1 billion in a convertible note last quarter, the first step in its bid to acquire control of the company. That boosted the company’s cash and investments to $8.2 billion, compared with $5.6 billion in 2011.
If U.S. and Japanese regulators approve, the takeover could happen by midyear.
Hesse and other senior Sprint executives didn’t discuss the pending merger when they addressed analysts Thursday. But they said they expected rival T-Mobile USA, a unit of Deutsche Telekom (PINK:DTEGY), to finally start selling the iPhone later this year.
Deutsche Telekom is seeking to acquire Metro PCS Communications (NYSE:PCS), the No. 5 carrier, and roll T-Mobile, the No. 4 carrier, into it if regulators approve the deal later this year.