Sprint Posts Loss as Churn Rises at PCS - TheStreet

Sprint PCS'


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



, 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.