Sprint Posts Loss as Churn Rises at PCS

Sprint PCS' (PCS Quote) latest earnings report shows the big wireless service continues to suffer from customer defections.

Sprint PCS, which on Thursday posted third-quarter numbers along with its big telco parent Sprint (FON Quote), reported a surprisingly high customer-churn number of 2.7%. That's up from 2.4% in the second quarter and indicates that the company is losing customers at a greater rate than many of its rivals.

The setback comes just as so-called wireless-number portability is due to kick in next month, an event that many observers expect to lead to further customer movement. PCS' problems pushed its shares down 9% in early trading Thursday.

Meanwhile, Sprint FON posted a third-quarter loss as weak demand for its core long-distance services offset a rise in wireless sales at PCS. Its shares advanced 2%.

For the third quarter ended Sept. 30, Sprint posted a consolidated loss of $498 million, reversing the year-ago profit of $519 million. Revenue slipped to $6.7 billion from $6.8 billion a year earlier.

Sprint FON lost 48 cents a share from continuing operations, reversing year-ago earnings from continuing operations of 54 cents a share. Before special items, FON Group EPS from continuing operations fell to 38 cents from 39 cents a year ago.

Sprint PCS, meanwhile, lost 7 cents a share for the third quarter, compared to a loss of 1 cent a year ago. Before special items, PCS reported a 7-cent loss from continuing operations against a 13-cent loss in the year-ago period.

Sprint PCS fell 47 cents to $4.85, while Sprint FON rose 38 cents to $16.12.