Sprint recently released their first quarter earnings of 2013. The 3rd largest carrier in US managed to narrow down their losses as compared to their previous year’s figure and managed to improve their revenues to $8.8 billion. The company is having a bad phase right now and its plan to leave Nextel may somewhat improve its profitability.
According to the results, the company sold over 5 million smartphones this quarter. Among these, 1.5 million were iPhones which is quite impressive but not that great as last quarter when they managed to sell over 2.2 millions handsets.
The company managed to earn revenue of @8.8 billion and narrowed down its losses to $643 million. Although, the figure is still pretty huge, it is a major improvement from the last quarter’s loss of $1.3 billion. With the company leaving Nextel, it was no surprise that the carrier lost a lot of subscribers. Sprint lost 572,000 customers when they made plans to leave Nextel, however they managed to add 12,000 new subscribers and hence the total figure went down to 560,000. As a result, now Sprint has only about 31.3 million customers on contract.
However, according to the company’s CEO Dan Hesse, this figure is likely to worsen. The company still has over 1.3 million Nextel customers and all of them will be kicked off when the deal completes in the next quarter. The major problem with the carrier was that it focused mainly on sales and marketing on its Nextel part and forgot to divert resources to their main Sprint service. According to CNET, a year ago, the company managed to sign 263,000 customers in the first quarter, however, in this quarter as already mentioned above, it managed to get only about 12,000 customers. This clearly shows that the carrier needs to focus on its service and if it wants to retain its position in the market, it should do much better than the current results. As the deal completes in the second quarter, Mr. Hesse is expecting profits and revenues to fall down. So don’t expect the company to make good profits even in the second quarter and we can expect some improvements only by the end of the year.
When it separates from Nextel, the company would be welcoming new ownership. The company is already in talks with a merger with the Japanese carrier, SoftBank and the deal is likely to close by July 1. Sprint has not been the best of the carriers in the country and with the merger with SoftBank, the carrier may hope to make some progress. SoftBank’s capital along with its leadership experience is sure to help the carrier grow in the coming quarters and we would like to see how the merger affects the company’s shares by the end of the year.