Has Sprint Nextel stopped hemorrhaging subscribers?
They're clotting: Sprint Nextel's Q1 '09 earnings report reported a loss per share of 21 cents in its latest report released Monday, but the long struggle back from consumer service perdition seems to be paying off as subscriber losses diminished remarkably for the Kansas-based mobile provider.
The company reports a net loss of $594 million, which compares year-over-year to a loss of $505 million. It's got a cash balance of $4.5 billion and total liquidity of $5.9 billion -- not bad, points out CEO Dan Hesse, considering the economy, especially since the company just paid off all its 2009 debt maturities. Sprint generated $796 million in free cash flow during the quarter.
Pre-paid sales (e.g., the new Boost Monthly Unlimited plan) and wholesale sales for devices such as the Kindle are faring well, he added, and "total subscriber sequential performance improvement was the best in Sprint Nextel history."
On the other hand, the company lost 1.25 million "post-paid" customers over the quarter, primarily due to business deactivations but with the economy factoring in. "We Need. To Do Better," Hesse said, with audible capital letters. Churn is up sequentially from 2.16% in Q4 '08 to 2.25% in Q1, but down from 2.45% a year ago.
There were 49.1 million Sprint customers by the end of the quarter, compared to 49.3 million 90-odd days before. The total includes 35.4 million post-paid subscribers -- most on CDMA, but a remarkable 8.9 million still on iDEN, and 1.2 million Power Source users using both networks. (Fun fact: 84% of postpaid customers have "prime" credit quality; that's up 3% from last year.) Sprint also has 4.3 million prepaid subscribers and 9.4 million wholesale and affiliate subscribers.
Things are getting better with call resolution and customer-care satisfaction, Hesse says -- this quarter marked the 15th straight month of improvement, and lowest-possible marks for customer service have declined remarkably. And call quality's on the upswing as measured by JD Power, especially where coverage areas and dependability are concerned.
Also on the increase: WiMAX service, due to reach Portland over the summer and on track, says Hesse, for service in Atlanta, Las Vegas, Chicago, Charlotte, Dallas/Fort Worth, Honolulu, Philadelphia, and Seattle during 2009. (New York, Boston, Washington DC, Houston, and the Bay Area are slated for 2010.)
Yes, the Palm Pre is still on for second quarter. That ought to make the Q2 round of handset-upgrade numbers pretty interesting; as for Q1, 8.6% of the post-paid customer base upgraded, with the rest of us loitering around the stores and annoying the salesclerks with questions about the Pre launch. [My local salesclerk says it's on for May 19, but one suspects she was simply trying to make a cranky customer feel better. -- AG.]
The company declined to give guidance for Q2. The market was comfortable with what it heard in the early-morning call, sending stocks up 33 cents/share (7.07%) in trading on Monday.