Sprint Nextel reports huge earnings decline
Sprint Nextel has posted their 4th quarter results later than most other companies, but the news wasn’t worth the wait for shareholders. Net earnings were down by 55%. Share prices dropped by 3% on the news.
The news isn’t as bad as the earnings results would indicate. Revenue increased by 7% to $11.3 billion on the quarter, which was actually slightly ahead of analysts’ expectations. The hit to earnings was largely a result of charges incurred during the merger between Sprint and Nextel last year.
Analysts were concerned that the company added fewer wireless customers than expected. They added 746,000 customers instead of the 900,000 hoped for. This fuels the concern of analysts that growth will slow since most consumers already have a phone. Sprint Nextel will be sharpening the focus of their wireless business this year by spinning off their local phone services. That business has been declining and the company can redirect those resources onto the wireless, where better financial results are possible.