Sprint Corp. (NYSE:S), the third-largest U.S. wireless carrier, surged in early trading after trimming losses and adding more customers in the fourth quarter.
Sprint jumped 7.3 percent to $8.23 at 8:10 a.m. in New York. The stock had retreated 28 percent this year through yesterday.
Net loss in the three months ended Dec. 31 shrank to $1.04 billion, or 26 cents a share, from $1.32 billion, or 44 cents a share, in the year-earlier period, the Overland Park, Kansas-based company said in a statement today. That beat analysts’ average expectation for a loss of 33 cents a share according to Thomson Reuters.
Revenue increased to $9.14 billion from $9.01 billion. The average analyst estimate was $8.97 billion.
Sprint said it added 58,000 net subscribers in the quarter compared with the average expectation for a loss of 83,500 from six analysts tracked by Reuters. The subscriber growth, which compared with a loss of 360,000 in the third quarter, included growth in connections for tablet computers and smartphones. Sprint ended the year with 53.9 million Sprint platform subscribers–its highest level ever.
Sprint, which is 80 percent owned by Japan's SoftBank Corp. (OTCMKTS:SFTBY), had been shedding customers in recent quarters as it shut down its older Nextel network on June 30 and other subscribers quit because of technical problems related to a massive overhaul of Sprint's remaining network.
Looking ahead, the company projects its 2014 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be between $6.5 billion and $6.7 billion, and capital spending of about $8 billion.
Sprint has been facing stiff competition from industry leaders Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T). SoftBank Corp., which acquired Sprint in July for $21.6 billion, has been eyeing an acquisition of T-Mobile US to make itself a much stronger competitor.
In the meantime, T-Mobile has been ramping up competition in the wireless business. It introduced an installment plan for smartphones, abandoning the long-term contracts used by the industry. It also rolled out early upgrade options and cheap international roaming, helping it stand out in the market.
At Sprint, the average contract customer’s phone bill was $64.11 last quarter, little changed from $64.28 in the previous three months. The total contract customer turnover rate was 2.15 percent, compared with 2.09 percent in the previous quarter and 2.18 percent a year ago.