Sprint PCS Q2 surpasses analysts’ expectations

Analysts expected Sprint PCS to report a second-quarter loss of 33 cents per share. Instead the carrier surprised the financial community by posting a net loss of $247 million, or 26 cents per share, compared with $456 million, or 48 cents per share one year earlier.

“Sprint released earnings this morning that exceeded our expectations in nearly all respects,” said Ned Zachar, an analyst at Thomas Weisel Partners.

Sprint’s revenue surged by 53% for the quarter to $2.26 billion, an increase from $1.48 billion the year prior. This was attributed to strong customer growth, reduced churn and increased average revenue per customer. The carrier also added about one million customers during the quarter, 843,000 of which were direct customers and 220,000 affiliate customers.

Although the net subscriber additions did not meet Thomas Weisel Partners’ Wall Street high estimate of 850,000, the firm maintains that its estimates were the highest on the Street. Most likely consensus expectations were somewhere in the range of 800,000, Zacher said.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also were up, to $491 million from $11 million in the same quarter last year, excluding nonrecurring items. This beat Thomas Weisel Partners’ EBITDA estimate of $322 million.

The carrier now is expected to post EBITDA in the low $500 million range for the third quarter and $1.7 billion for the full year 2001.