Sprint 4Q08 Earnings

No surprises here, except for a bright spot that Sprint managed to come in close to (poor) expectations. As we pointed out in a previous entry, the majority of the forward looking statements revolved around the continued commitment to churn reduction, the focus on cost cutting, debt management, and the launch of the Palm Pre – which for Sprint must be a game changer and a real competitor to the iPhone. While the numbers were not good in contrast to their competitors, there seems to be some stabilizing of metrics (the reduction of the churn number was substantial) – this is critical to maintain shareholder confidence and the market perception of viability.

From Reuters:

*Q4 shr loss $0.57 vs $10.31 shr loss a year ago

*Q4 rev $8.4 bln vs Street view $8.5 bln

*Q4 postpaid subscriber losses 1.1 mln

*Sees subscriber loss improvements in 2009

*Shares closed Wednesday at $2.71 on NYSE

NEW YORK, Feb 19 (Reuters) – Sprint Nextel Corp (S.N), the No. 3 U.S. mobile service, posted a quarterly loss on Thursday and said a total of 1.3 million wireless customers had left its service during the quarter.

Sprint, which has struggled with customer defections in the last few years, reported a loss of $1.6 billion, or 57 cents per share, compared with a loss of $29.3 billion, or $10.31 per share, in the same quarter a year earlier when it had a big charge.

Revenue fell to $8.4 billion from $9.8 billion a year earlier.

The company lost 1.1 million postpaid customers who pay monthly bills in the quarter, in line with average analyst expectations, according to 4 analysts contacted by Reuters. It said total wireless customers declined 1.3 million in the quarter.

Sprint expects subscriber losses to improve in 2009. It said 2009 capital spending will be consistent with 2008 levels, excluding spending on high speed wireless WiMax technology.

It expects to continue to generate positive free cash flow during 2009. (Reporting by Sinead Carew; Editing by Derek Caney)

Qwest 4Q08 earnings

Qwest announced their 4Q report today, and beat estimates by .01 per share. Given the organizational changes (and charges), along with economic conditions, this is a positive sign that Qwest should weather expectations in the short term, and remain a viable player in the landscape. Management focus on profitability and operational efficiencies are influencers in the performance, and Telwares has observed and can validate these actions first hand in the broader competitive marketplace.

Summary from Briefing.com:

Qwest beats by $0.01, reports revs in-line (Q) 3.37 : Reports Q4 (Dec) earnings of $0.11 per share, $0.01 better than the First Call consensus of $0.10 (including $0.01 severance charge); revenues fell 3.5% year/year to $3.31 bln vs the $3.31 bln consensus. In light of the current economic environment, the co is maintaining a cautious view on its outlook for 2009. The co currently ests its pension funding requirement in 2010 could be in a range of $0 to $300 mln. For the full year 2009, Q currently anticipates that adjusted free cash flow will be approximately $1.4 to $1.5 bln. Adjusted EBITDA is expected to be $4.2 to $4.4 bln vs $4.296 bln consensus, inclusive of the expected increase in non-cash pension and OPEB expense. Finally, capital investment is forecasted to be about $1.8 bln and will be closely aligned with business conditions. In the quarter, Q migrated more than 180,000 customers from its MVNO service to the Verizon Wireless platform. The co reduced its workforce by 1,700 employees in the quarter resulting in a full-year workforce reduction of 11%. In the fourth quarter, each of Qwest’s three business units reported strong improvements in operating margins both sequentially and year over year. Co says, “Our improved profitability in the fourth quarter reflects an intense focus by the entire team… Under challenging market conditions, we delivered strong performance across each of our business units. The execution that we demonstrated over the past couple of quarters will provide a solid foundation in the current difficult economic climate.”