Sprint, which has agreed to purchase the wireless carrier Nextel Communications, said yesterday its second-quarter earnings more than doubled...
KANSAS CITY, Mo. — Sprint, which has agreed to purchase the wireless carrier Nextel Communications, said yesterday its second-quarter earnings more than doubled as its wireless business continued to soar.
For the three months ending June 30, the telecommunications company reported earnings of $599 million, or 40 cents per share, after preferred-dividend payments, up from $229 million, or 16 cents per share, during the same period a year earlier.
The results included $33 million in impairment of computer applications and $27 million in costs associated with Sprint’s proposed deal for Nextel. The deal is expected to close in the current quarter.
Without those adjustments, the company said it earned 42 cents per share, compared with 21 cents in the year-ago quarter. Revenue increased 3.6 percent to $7.1 billion from $6.87 billion a year ago.
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Analysts surveyed by Thomson Financial had expected earnings of 36 cents per share on revenue of $7.07 billion.
“I couldn’t be more pleased with the level of momentum we’ve achieved as we’ve entered the final stages of our merger,” Gary Forsee, Sprint’s chairman and chief executive officer, told analysts during a conference call. “We’re heading down the homestretch with the finish line in sight.”
Shares of Sprint rose $1.40, or 5.6 percent, to close at $26.37 yesterday.
In the second quarter, revenue from Sprint’s wireless segment rose 12 percent to $4.04 billion. Sprint added 588,000 total subscribers during the period to bring its customer base to 26.6 million, up 20 percent from a year ago.
Subscriber additions during the quarter were much lower than the 897,000 added a year ago and 1.3 million added in the first quarter, which the company blamed on seasonal declines, transition of wholesale partner Qwest’s subscriber base and a resale partner eliminating around 62,000 inactive subscribers from its list.
Long distance continued to suffer from losses due to customers switching to wireless or Internet-based phone service with quarterly revenue declining 8.1 percent to $1.7 billion.
But stronger business sales, cost-cutting and Sprint’s partnership allowing cable companies to provide phone service to customers helped the division achieve $136 million in earnings, compared with a $139 million loss last year.
Kirkland-based Nextel Partners said yesterday it withdrew a lawsuit against Nextel Communications that was seeking an injunction against the company for violating its joint-venture agreement.
The suit claimed that Nextel Communications of Reston, Va., was violating a joint-venture agreement by not letting Nextel Partners in on its merger plans with Sprint as they relate to branding and marketing. Under the joint-venture agreement, Nextel Partners exclusively sells Nextel-branded products and services in rural and midsize cities for Nextel Communications.
Yesterday, Nextel Partners voluntarily pulled the suit from New York Supreme Court because the two parties agreed to arbitration.
Seattle Times business staff