reaffirmed its financial guidance and reiterated its support for a controversial wireless-spectrum swap.
The company made the comments Monday at the Lehman Brothers Global Wireless conference in New York. The remarks come just a month after Nextel, in
posting its latest quarterly numbers, guided to strong subscriber and cash-flow growth for 2004.
"Coming off a strong first quarter, we see Nextel's robust business trends continuing," CEO Tim Donahue said Monday. "We are firmly on track to achieve our 2004 guidance."
Analysts expect the Reston, Va., wireless service provider to earn $2.09 a share on revenue of $12.8 billion for fiscal 2004, according to a Thomson First Call survey.
On April 22, Donahue boosted Nextel's year-end subscriber-growth guidance to 1.9 million users from the previous 1.8 million-add forecast. He said free cash flow for the year would hit $1.7 billion, up from the $1.6 billion January projection.
The company's April comments came on the heels of a disappointment in January, when Nextel warned that 2004's subscriber growth wouldn't match 2003 levels. The company added 2.3 million subscribers last year.
Nextel has been among the fastest-growing wireless telcos by virtue of its push-to-talk walkie-talkie feature. But analysts have been taking the company's pulse with a bit more anxiety recently as big rivals like Verizon Wireless have rolled out their own competing services. After rising sharply in 2002 and 2003, Nextel shares have given up ground this year as investors wonder about tech-sector valuations. On Monday, the stock slumped 53 cents to $22.14 a share.
As for the wireless spectrum issue, Wall Street is eager to see Nextel complete a deal with the government. The radio spectrum swap, in which Nextel would vacate airwaves used by emergency services in exchange for some high-priced real estate elsewhere,
could set the telco up for a bit of a windfall.
has opposed the deal, saying the spectrum is worth much more than what Nextel is offering to pay for it. The nation's leading wireless service provider contends that the valuable space should be auctioned on the market.
The Washington Post
reported last month that the government might require Nextel to chip in as much as $2.35 billion to complete the transaction. Even so, Legg Mason analyst Craig Mallitz estimated that Nextel could be looking at a gain of around $1.7 billion. Mallitz has a buy rating on Nextel, and his firm holds a small stake in the company.
"Over the past three years, we have worked tirelessly, arm in arm with the public-safety community to resolve this interference issue," Donahue said Monday. "I am confident the FCC will do the right thing by adopting the Consensus Plan."