By Ingrid Lunden
U.S. wireless carrier Sprint Nextel (S) has just posted its results for Q2, and while it continues to prepare for a brighter future ahead, it reported a widening net loss of $1.4 billion, with negative EPS of $.46. That's compared to a net loss of $847 million and a diluted net loss of $.28 per share in the second quarter of 2011. Overall revenues were $8.8 billion, while wireless service revenues were $7.3 billion. The operating loss was $629 million, compared to operating income of $79 million a year ago.
The company says it sold 1.5 million iPhones in the quarter, some 40 percent to new postpaid customers. That is exactly level with the number of iPhone sales it had last quarter. The iPhone push helped contribute to strong postpaid net additions of 442,000, double the number Sprint reported last quarter and the same quarter a year ago.
As a point of comparison, iPhone sales at AT&T (T) this last quarter totaled 3.7 million on overall smartphone sales of 5.1 million. Verizon (VZ) sold 2.7 million iPhones in the last quarter on total smartphone sales of 5.9 million.
Analysts had been expecting a loss per share of 40 cents, on revenues of $8.73 billion. That represents a wider loss than the actual loss per share for the same quarter a year ago, when the negative EPS was -28 cents per share.
The iPhone, which Sprint first started to carry in the fourth quarter of 2011, remains central to the Sprint story, as does the company's plans for a future high-speed network.
The company's stock has gone up by over 55 percent in the last six months, which Forbes attributes both to strong iPhone performance as well as "increasing optimism" about the company's Network Vision project, as the high-speed upgrade is called, as well as its LTE work. That Sprint is rolling that out in a few markets already - it's now launched 4G LTE in five major markets and 15 cities - has been a strong sign to the market that the carrier means to do what it says with its upgrade strategy.
Still, how that new network strategy is playing out among consumers remains murky. In the release, Sprint did not reveal any sales numbers for the first 4G handsets on its network, debuted this quarter. These include the Galaxy Nexus, LG Viper 4G LTE, HTC EVO 4G LTE and the Samsung Galaxy S III.
One positive metric came in the form of postpaid net subscriber additions. Sprint added 442,000 of these typically higher-spending customers in the quarter, up 68 percent sequentially and "driven by best ever quarterly churn performance of 1.69 percent," Sprint noted.
In Q1, Sprint had also posted an operating loss ($255 million) but on the strength of 1.5 million iPhone sales - 44% to new customers - the company also reported 263,000 postpaid net additions, with 1 million net additions overall. Although Sprint came relatively late to the market after AT&T and later Verizon in offering the iPhone, it was clearly serving some pent-up demand: in Q1, nearly 42% of total iPhone sales were to subscribers new to Sprint.
There will be a conference call at 8AM Eastern time and we'll update with news from that.