Despite reporting a $720 million quarterly loss, the wireless provider's announcement of a net customer gain after three years of subscriber attrition drove its stock up 4%.
After three years of losing valuable post paid customers, Sprint Nextel finally reported a net customer gain, driven by prepaid customers and its hot-selling EVO handset.
However, in reporting its second quarter results Wednesday, Sprint reported a loss of $720 million against a loss of $384 million in last year's second quarter. Revenue was $8.03 billion -- a drop of 1%.
Investors viewed the results as positive and sent Sprint stock up 4% in early trading.
The company is still in a precarious balancing act as it seeks to take advantage of its new 4G network even as it's been thwarted by a shortage of its EVO handsets. Sprint has a strong headstart over Verizon Wireless' 4G LTE network scheduled to debut later this year with data cards and voice ready handsets expected next year.
"Our intense focus for the past ten quarters on improving the customer experience, strengthening our brands, and generating cash are paying off," said Dan Hesse, Sprint Nextel CEO, in a statement. "We feel we can confidently improve our subscriber forecasts for the second half of 2010 and deliver positive total net wireless subscriber additions for the remainder of the year."
The EVO, manufactured by HTC, has proven to be a worthy competitor to Apple's iPhone and Verizon Wireless' Droid handsets, both of which have enjoyed excellent reception in the market. Hesse said Sprint would have enjoyed a net gain in subscribers even without the EVO, which has been in short supply.
Through its majority-owned Clearwire operation, Sprint has been extending its high-speed WiMax network in major U.S. cities. The company noted that new deployments are expected to be rolled out in Boston, New York, San Francisco and Washington D.C. by the end of the year enabling the network to cover some 120 million persons.
Nextel continued to be a drag on Sprint as its iDEN network lost almost 364,000 customers, Sprint said.
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