Sprint Adds Subscribers, but Loses Badly on Earnings

The wireless carrier reports a huge increase in subscribers after Sept. 11.
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Sprint PCS

(PCS)

announced results Wednesday, reporting strong gains in subscribers but a wide miss on earnings expectations.

Wall Street will have to wait until Thursday morning before the company addresses its future outlook.

Sprint PCS whiffed Street estimates with a 29-cent loss. Analysts expected the company to trim its quarterly loss to 22 cents. The wireless carrier posted $2.65 billion in revenue, better than analyst expectations of $2.36 billion, as reported by Multex.com.

The company reported after the market's close Wednesday that it managed to add an astounding 1.2 million new customers in the third quarter, as well as 384,000 consumers brought in by PCS affiliates. For comparison's sake, PCS wowed the Street with 843,000 additions in the second quarter. Investors who were hypothesizing about a post-Sept. 11 mobile-phone service sign-up frenzy now have a concrete data point to enjoy.

After big strides last quarter, the wireless operator lost $1 of its average revenue per user, or ARPU, as that figure slipped from $63 to $62. The PCS group managed to make strides in reducing its cost to acquire customers, spending only $320 to reach out and enlist new customers this quarter, compared to the second quarter's $340 average outlay. Finally, the critical measure of growing wireless phone companies, EBITDA, dipped from the second quarter's $491 million to $402 million in the third quarter.

The market had some previous good news to go on in anticipating a good quarter for subscriber acquisition numbers. Nationwide retail outlet

RadioShack's

(RSH)

August results pointed to wireless communications as its best seller, with Sprint PCS leading the way. Investors will be anxious to hear if management thinks it can keep up the bustling levels of new users.