Nextel beats estimates

Nextel Communications added 502,000 new customers in the first quarter, beating Wall Street’s estimates that ranged from 475,000 to 500,000 customers.

With the report, Nextel became the second mobile operator this week to report financial metrics that exceed expectations, a good sign that the mobile industry is rebounding from slumping growth.

The nation’s fifth-largest wireless operator reported operating cash flow increased 66% to $586 million from $353 million the previous year.

“We are executing our cost-cutting initiatives and strategic alliances aimed at reducing expenses producing an 8 percentage point operating cash flow margin improvement over 2001's first quarter,” said Jim Mooney, Nextel’s executive vice president and COO. “We expect to continue to reap the benefits of these actions in the coming quarters.”

Nextel executives said they hoped the company’s financial performance in the first quarter would reduce concern over the company’s creditworthiness at ratings agencies. Moody’s Investor Service last week warned it might cut Nextel’s credit rating.

Excluding charges, Nextel’s loss was $279 million, or 35 cents per share, less than the 40-cent loss consensus estimate. Revenues increased to $2.16 billion from $1.74 billion in the first quarter. However, average revenue per user fell to $68 from $71 a year ago.

--Lynnette Luna, Senior Editor