Sprint reports minor profits and not-so-minor loss of customers for Q2 2014, not out of the woods just yet
posted by Peter K. / Jul 30, 2014, 7:48 AM
Just as we told you several days ago, Sprint just released its financial report for Q2 2014. The third largest US carrier reported that it has brought home a net income of $23 million (or $0.01 per each share), which seems to be “the best performance in almost seven years”. Also, the carrier reported that it scored consolidated operating income of some $519 million throughout the trimester, which is its highest result for the last seven years as well. As a comparison, just a year ago Sprint reported catastrophic losses of $1.6 billion.
“We reached several key milestones for the company this quarter, including largely completing a multi-year project to upgrade our core 3G and voice network, expanding 4G LTE coverage to approximately 254 million people and launching nationwide availability of HD Voice,” Sprint CEO Dan Hesse claimed.
Sprint's earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to$1.83 billion during Q2, which is a whopping 30% upward spike compared to the same period year-over-year. The EBTIDA margin of almost 24% is also a record-breaking one, as Sprint has not seen better results during the last 6 years. The company claims that the main reason for this increase are the reduced expenses in certain departments.
Sprint's report caused the company's stocks to increase by 1.9%. However, said shares had lost 16% of their value during the past two months and 26% year-over-year.
Sprint revealed that it has successfully expanded the coverage of its LTE and HD Voice services and now cover more than 254 million people. Unfortunately, this expansion did not lead to a subsequent increase of its user base - on the contrary, the carrier reports that it lost 220,000 of its customers in Q2. Compared with the client losses during the previous two quarters (383,000 and 520,000, respectively), the Q2 one is not that bitter.
"Our complete network replacement impacted the network experience, so we lost customers last quarter," Sprint CEO Dan Hesse claimed.
Sprint's heavily-rumored acquisition of T-Mobile, which might be the result of a possible deal between SoftBank and Deutsche Telekom, might be one of the ways to stop the bleeding of customers. Sprint is allegedly backed up by several banks, which will finance the merger. It's speculated that the acquisition sum will vary between $30 and $40 billion.
OVERLAND PARK, Kan. (BUSINESS WIRE), July 30, 2014 - Sprint Corporation (NYSE:S) today reported operating results for the first fiscal quarter of 2014, including net income of $23 million, the best performance in almost seven years when excluding the non-cash transaction-related impacts from last year, and consolidated operating income of $519 million, the highest in more than seven years.
“We reached several key milestones for the company this quarter, including largely completing a multi-year project to upgrade our core 3G and voice network, expanding 4G LTE coverage to approximately 254 million people and launching nationwide availability of HD Voice,” said Dan Hesse, Sprint CEO. “Our complete network replacement impacted the network experience, so we lost customers last quarter. To improve customer confidence given our recent network build progress, we launched the Sprint Satisfaction Guarantee, which invites customers to experience our new and improved network and enjoy the value of our Sprint Framily plans.”
Adjusted EBITDA* of $1.83 billion grew 30 percent over the prior year period and Adjusted EBITDA* margin of nearly 24 percent was the company’s best in six years. Wireless Adjusted EBITDA* of $1.8 billion increased nearly 40 percent from the prior year period, driven mostly by lower expenses across several areas of the business, partially offset by declining wireless service revenues. Lower postpaid subsidy costs associated with impacts of the Sprint Easy Pay installment billing plan and device sales mix as well as lower customer care and cost of service expenses all contributed to year-over-year growth in Wireless Adjusted EBITDA* of nearly $500 million.
Sprint Platform Subscriber Loss Improves
The Sprint platform reported a net loss of 220,000 customers in the quarter, compared to a net loss of 383,000 customers last quarter and 520,000 customers in the prior year period. Sprint platform postpaid net losses of 181,000 during the quarter were largely due to expected elevated churn levels related to service disruption associated with the company’s ongoing network overhaul. However, Sprint platform postpaid gross additions grew by 16 percent compared to the year-ago quarter, and retail smartphone sales were nearly 5 million, representing a record 87 percent of total retail handset device sales in the quarter. Sprint platform prepaid net loss of 542,000 customers was primarily caused by the timing of the annual Lifeline program recertification process that impacted the Assurance Wireless® subscriber base. Sprint added 503,000 wholesale and affiliate customers during the quarter. The Sprint platform served over 53 million subscribers at the end of the quarter.
Network Deployment Reaches Key Milestones
Sprint’s replacement of its entire 3G and voice network, one of the most complex network upgrades in history, is largely complete and network performance metrics continue to improve. Sprint also hit its mid-year target for 4G LTE coverage, as the company now covers approximately 254 million people in 488 cities across the country including Pittsburgh and Buffalo, N.Y., which launched today.
Sprint HD Voice service is also now available nationwide and represents the new Sprint standard for crystal-clear voice calls. Sprint’s HD Voice provides fuller, more natural-sounding voice, plus noise-cancelling technology that virtually eliminates background noise from places like busy roads or crowded restaurants1. Over 16 million customers currently have HD Voice-enabled devices.
The deployment of Sprint Spark™, an innovative combination of advanced network and device technology that leverages the company’s 800MHz, 1.9GHz and 2.5GHz spectrum, continues to progress and is now available in 27 markets across the country. Twenty-two Sprint Spark-capable devices are currently available, including the recently launched Samsung Galaxy S® 5 Sport, LG G3, and HTC One (M8) Harman/Kardon® edition.
Sprint Satisfaction Guarantee Demonstrates Confidence in America’s Newest Network
In June, the company announced the Sprint Satisfaction Guarantee, providing wireless users a worry-free experience of Sprint’s improved network, exclusive Framily plan and unique services. If customers aren’t completely satisfied with the Sprint experience within the first 30 days, Sprint will refund the cost of their device and waive all service and activation charges.
Sprint Earns Third-Party Recognition for Customer Experience, Innovation and Corporate Responsibility
According to results from the 2014 American Customer Satisfaction Index released in May, Sprint is the most improved U.S. company in customer satisfaction, across all 43 industries, over the last six years. Additionally, Light Reading recognized Sprint with a 2014 Leading Lights Award in the category of Most Innovative 4G Service for Sprint Spark. Sprint was also the winner of the Informa Telecoms & Media MVNO’s Industry Awards Best Wholesale Operator for the second consecutive year.
Sprint also received multiple awards for its corporate responsibility efforts during the quarter. Sprint was recognized by the Department of Energy for achievements in the Better Buildings Challenge for energy reduction, and the Environmental Protection Agency recognized Sprint with the WasteWise National Partner of the Year Award for Very Large Companies for diverting solid waste from landfills. Additionally, Sprint received the VITA Achievement Award for Environmental Sustainability from the Wireless Foundation.
The company continues to expect calendar 2014 Adjusted EBITDA* to be between $6.7 billion and $6.9 billion.
To hope a company fails and competition is yet more reduced and ruined is a terrible thought, you must shop at wal mart too... The idea of hoping a major carrier to fail is economically terrible and drives prices up, are there really people like who exist on this planet? Sadly so.
The Sprint bashing is getting old people... I have noticed dramatic improvements in their network and the technology they are using for Sprint Spark and the 8-channel radios they are using will give them the fastest network in the country. I'm going to be laughing when everyone eats their own words when they start bringing in speeds well over 100 Mbps consistently and when no other carrier can match.
id say give it time, i used to work for sprint, and when project vision was introduced i knew right then that there will be growing pains, i warned spring customers of this 3 years ago when no one really knew what it was. but keep in mind that only sprint has the spectrum to become very dangerous, even more so than T'mobile who is fighting a price war, not a network war, which sprint assert themselves in, thats why both companys together would be killer and competition will be much greater...low end spectrum is needed tho as both companies doesnt have much and what sprint got from nextel isnt much of it at all
In case you aren't aware of it, Verizon is getting 100+ Mbps download speeds right now on a single 20 MHz carrier of AWS (LTE B4) in NYC and other Metro areas. Sprint Spark is not what they are making it out to be and the lack of good, contiguous nationwide spectrum will prevent many customers from ever going over to Sprint. T-Mobile's native coverage area is not very impressive either.
I have been seeing 2-10mbps down on veriozon throughout Northern California. On sprint lte i seem to bounce between 12-30mbps down. And the above screenshot you can see 76 and it wasn't on spark. It was on a note 3 that isnt spark capable. The next day 80mbps was acheived. Where I work it will consistently give me 20+mbps.
With verizon if you are lucky enough to be in a fast data market, you will burn through your data limit very quickly. I would rather get 20mbps down with unlimited data than 100mbps down with only 1-4gigs to use. For now I will suffer with this 80mbps and unlimited data ;)
I checked out your screenshot on photobucket and it is indeed on Spark. When you see the little icon that looks like a "Spark" or a Snowflake that indicates you are connected to it. I haven't really checked what spectrum Sprint has but they would have to be running 15 or 20 MHz to achieve those speeds you said you got. Verizon's max theoretical download on 10 MHz of 700 is around 74 but that would have to be on a tower with pretty much no users.
Sprint 4G speeds are not bad, but the reason I would never consider them is because their native coverage is too small here in my state. From what I have been told by people that have it here, is you basically have to go out and find 3G/4G in the rural areas. Their signal does not propagate well (1900 and 2500 MHz)and they don't have enough towers like Verizon and AT&T for pretty much complete wireless data coverage.
As far as unlimited data, that only applies to usage on your smartphone and excludes wifi tethering. Tablets and Mobile Hotspots all require tiered data plans.
Personally, I will sacrifice unlimited data for a network that has coverage pretty much everywhere. One more thing to consider, and that is when Verizon starts shutting down it's CDMA network along with Sprint's roaming, those customers are going to lose a lot of coverage.
I haven't checked to see if a new reciprocal agreement was made but July 1, 2016 is when the roaming agreement with Verizon(Alltel)will end. I don't see Sprint building enough new sites or collocating on others to fill in the coverage they will lose by that time and the former Alltel areas Verizon would have been forced to divest that could have helped Sprint have already nabbed up by AT&T. Propagation of LTE on 1900 isn't that great but when they start using 800 that will be a big improvement. In all honesty, I am not going to knock Sprint because they seem to be serious about rebuilding their network and it works well for people.
I'm telling you that isn't spark. And I'm sorry, that screen shot was on the s5. It was right when I switched devices. The reason why I know it isn't spark is because I work for sprint. Not in sales or customer service either. This was done on regular LTE. There is not one 2.5g or 800mhz LTE tower in sac county. This was off of a 1900mhz LTE tower.
Sad to see that Sprint's improvement is that they're losing less customers. They talk of all these « improvements » to their network but even in large cities I have yet to notice a difference. Still poor coverage with agonisingly slow data speed.
Omg!, you're so right!, even here in its home town Sprint is terrible!..
I went to a Sprint store to test their spark vs T-Mobile, their DL was 10 vs 21 DL from T-Mobile!.. Try it if you don't believe me!.. They suck!
Actually, due to my contract being up, I did a test drive a month and a half ago. While I found Tmobile on par with the other three carriers, it became a game of hide and seek for signal 11miles outside the city. Since most of my time as a road technician is outside the city limits, I found this unsatifactory. Even with all the hype surrounding TmobIle's "awesome" network, I found myself reverting back to my Sprint phone more than I would have thought. At times I found myself rooting for Tmobile in the city. Outside of these limits jarred the reality that Tmobile has a long way to go. What good is speed if one cannot pick up a radio signal to deliver the goods.
People can try to act like parrots on this site by recycling other's hyperbole of Sprint's network, but I find the network more solid than ever. I seriously have doubts on what people are claiming under Sprint's soon to be completed markets. I could easily claim something to draw attention away from a product or service, but the truth will always prevail.
Sprint is on a return. I'm very confident that Sprint doesn't wake up in the morning asking what it can do to piss people off. It has been very forward in informing its customers that tearing down an old network to replace it with a new one, would be painstaking.
While I realize these sites are used for marketing tactics by representatives of their respective carriers to sell their product,, I wish for people to be a little more mature and accurate when it comes to providing an opinion of something.
If we have the same bad experience with Sprint and we happen to report that bad experience I'm not understanding how that makes us « parrots ».
Before the network teardown I experienced medicore speed at best. During the teardown, just awful. In my area where they claim to have improved, they still suck. Others have the same experience as me, so are they parrots, too ? Yes, we all know Sprint is doing this and that to their network, but that doesn't matter to the average user. What matters is the speed and stability of the network. So far, there's yet to be evidence of Sprint's « improvements » according to what commenters have said.
We have/ had Sprint, and it was lack luster and still is.
I wish for people to be more analysing and accurate when it comes to actually reading our comments. We didn't just all suddenly decide Sprint sucked. We have had experience with it therefore we are accurate in « providing our opinion on something. »
I understand what you are saying but I believe you missed my point. A good percentage of PA readers are reps of different carriers. Many have probably never laid hands on a Sprint device or even used Sprint. They simply mimick jargon from others to propogate false opinions in order to present a cognitive attitude towards their respective carriers for sales. You know it and I know it. We can't ignore it. Comments such as "I'm leaving Sprint to go to Tmobile" is an old sales tactic. Some of these comments are generated by those that never had Sprint to begin with or any other carrier they may mention. It simply is to place a sense of hype in order to contemplate a defection.
It grows aggravating to say the least. Knowing that carriers and their devices are highly dependent on software to connect, many of my friends have noticed a noticeable improvement just by performing a PRL or Profile update. This re-establishes the device for the software changes that may have conflicted the original profiles.
My wife noticed an immediate improvement. I was not so lucky. Apparently, during the network upgrade, my device had coincidentally been suffering an internal 3G radio problem that would intermittently prevent me from establishing a signal. I was blaming Sprint and once I replaced my device, my phone has had very little problem connecting to the newtork. From where I'm standing, I'm not seeing the issues many people here seem to be complaining about. While it's not perfect due to 70% completion, the improvents have been very good. Best I've had in 7 years.
If anything I feel that the east coast has to have a better newtwork then the west coast since 70% of Sprint is developed far yonder, but still a company that employes over 100,000 and can't upgrade or improve their network is just pittiful. Companies that only take millions but don't deliver the desired service should be investigated by the IRS and go bankrupt.
Sprint made a profit losing 220k customers.
That is amazing, but how is it possible? Then again T-Mobile added over a million customers and lost big bucks. This industry is backwards. Also, should Softbank acquire T-Mobile using their woe is me we lose customers shtick (which is looking like it works more every day.) Legere is going to run the company?
Backwards man, backwards.
Sprint sucks. (loses customers) Legere sucks. (loses money) This won't end well.
its not backwards, t-mobile prices are not sustainable at where they are now, thats why even tho they add customers they lose money, sprint prices are closer to verizon and att, thats why they actually made profit in this situation. T-mobile has to raise their prices to become profitable, they know this as well, but thats not whats important, T-mobile needs customers..bad, and they are getting them at a fast rate but it goes to show you how small they really are because they are still #4 after all these quarters. But when that customer base goes up and they are satisfied, the prices will rise, or they will fail
Actually no, the issue is that T-Mobile has a massive amount of CapEx going on right now with their LTE buildout. Once that's completed in Mid2015 then their expenses go down.
On the other hand, you have Sprint not investing in their network...they're counting on being merged with T-Mobile instead.
Hmm. Actually, I think it's the opposite. Sprint has insane CapEx expenses right now, just like T-Mobile. They're renovating their network on a scale far greater than T-Mobile. And they're not implementing suicide pricing, unlike Magenta.
Don't mean to disrespect your view, but where the hell do you get the idea Sprint hasn't been investing in its network? A complete teardown and rebuild isn't cheap nor is it quick. Billions have already been spent and billions more has been allocated for completion. Please refrain from the hate. It consumes a logical thought pattern and blocks factual information.
Based on the idea that my entire county is still EVDO-only when it comes to Sprint, while T-Mobile is lighting up LTE (and already has HSPA+ covering 50% of the place), and Verizon and AT&T (obviously) already have lit up LTE, though it isn't as fast as T-Mobile's HSPA+.
We're a NYC exurb, if they're not spending here, then they're really shorting things. Then again, deploying BRS in the density required to allow for decent service is a very expensive proposition, so it makes business sense to wait for a merger you know is coming instead.
I don't hate. Why bother? Rational analysis proves my point, i don't need to. I suppose I shouldn't complain though, as you can see from other comments, some areas Sprint hasn't even managed to deploy EVDO yet.
I live in Rochester NY. It is a major metropolitan area. I'm not seeing the issues you claim. I can't deny the pains that came with the rebuild, but I have to say that the network has never been better. Places I had no service or little service, have better signal now and faster speeds have been very noticeable.
As I explained in another post, software is crucial in establishing an accurate connection. A simple PRL or Profile update can possibly reset the software conflicts that came with the new network. It actually worked for several of my friends and my wife. It retrains the software within the device. Performing these updates every several months is highly recommended anyway.
It's possible because Dan Hesse's management team has had the difficult task of turning a multi-billion dollar company around that was faltering under old management. It doesn't happen over night. Much goes into restructuring a plan and guideline. The company has learned to do more with less. It has to because VZW and AT&T have always been able to more with more to retain dominance. Tmobile's aggressive giveaways, cannot be sustained. How do you make money if you give things away?
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