reconfirmed the market's fears of a wireless holiday whiff.
On Tuesday morning the wireless carrier preannounced its subscriber addition figures for the December quarter, and the news wasn't good. It's a strange world when investors turn up their noses at 1.1 million new subscribers in a three-month period, but the cold truth is that Sprint PCS vowed to deliver 1.3 million.
Sprint PCS shares have dropped more than 30% since the beginning of January as investors began to get an inkling of the sour returns to come. The stock fell as much as 6% in recent trading Tuesday, to $16.95.
Sprint PCS joins
in the holiday slump column as, one by one, members of the sector chronicle a Christmas season that wasn't nearly as merry as investors has planned. Despite new phone models from
, and three quarters of solid subscriber gains under U.S. carrier belts, the magic fizzled in December.
By comparison, Sprint PCS managed to sign up a whopping 1.2 million subscribers in the fall quarter, when it was expected to deliver just 800,000. Leading the pack, Sprint PCS used its account spending limit programs, designed to get consumers in the lower credit ranks signed up, to secure more than 75% of those users. The company said its fourth-quarter additions were more evenly balanced between ASL and regular customers.
Management attributed the shortfall to "lower than normal holiday sales" in a press release. Because of the shortfall, Sprint PCS trimmed its
EBITDA projections for the full year 2001 from $1.6 billion to $1.5 billion.
The carrier's customer churn rate continued its upward climb, going from 2.2% in the second quarter to 2.6% in the third, and on up to 3% in this latest quarter, a reversal that Sprint PCS predicted when giving fourth-quarter guidance.