Updated from 8:04 a.m. EST
Sprint Nextel (S) fell short of Wall Street's estimates for the third quarter Friday as the company's struggling wireless division remained under pressure.
The Overland Park, Kan., wireless phone shop swung to a third-quarter loss of $326 million, or 11 cents a share, compared with a profit of $64 million, or 2 cents a share, in the year-ago quarter. Excluding items, Sprint's earnings came in at break even, falling short of Wall Street's average estimate for a profit of 3 cents a share.
Sprint said net operating revenue declined 12% from a year ago to $8.82 billion. On average, analysts forecasted revenue of $8.85 billion, according to Thomson Reuters.After trading 6% higher in the premarket session Sprint shares were lately down 7.1% to $3.42. The stock has now dropped 72% for 2008. Sprint's struggling wireless division saw revenue decline 13% from the same period a year ago to $7.53 billion, as the unit continued to see subscriber losses. Sprint said its total count of wireless customers shrank to 50.5 million from 54 million in the year-ago quarter and 51.9 million in the second quarter of 2008. Total wireless customers fell by a net 1.3 million, including losses of 1.1 million post-paid customers and 329,000 prepaid users, which was slightly offset by a 130,000 increase in the number of wholesale and affiliate subscribers, the company said. The churn rate, or the rate at which customers left the service, of traditional post-paid subscribers shrank to 2.15% from 2.3% in the same quarter a year ago, although that figure rose from 2% in the previous quarter and is still well above that of rivals AT&T (T - Get Report) and Verizon (VZ - Get Report).