Sprint Nextel's up-and-down road to recovery continued as the company reported adjusted second-quarter results that beat Wall Street expectations as well as a slower loss of subscribers, an Associated Press report said.
But the third-largest wireless carrier in the US also said it expected customer losses to ramp back up next quarter and said was selling â‚¬1.98 billion (US$3 billion) in convertible stock, partly to pay down debt, the report added.
Shareholders reacted by hammering Sprint's shares, sending them down â‚¬0.78 (US$1.21), or 14.2%, to close at â‚¬4.7 (US$7.34).
Stifel Nicolaus analyst Christopher King, quoted by the Associated Press report said that he's 'cautious' about Sprint's ability to create 'significant common shareholder value in the near-term,' not only because of issues specific to Sprint but also due to broader dynamics in the U.S. wireless industry.
The Overland Park, Kan.-based company reported that it lost â‚¬223 million (US$344 million), during the quarter ending June 30. By comparison, the company earned â‚¬12.3 million (US$19 million), during the same period a year ago.
Revenue fell 11% to â‚¬5.8 billion (US$9.06 billion), below the â‚¬5.9 billion (US$9.17 billion) expected by analysts.
Sprint Nextel's wireless business reported a 12.5% decline in revenue to â‚¬4.99 billion (US$7.7 billion) as it lost a net of 901,000 subscribers, including 776,000 valuable 'postpaid' customers who pay monthly bills.
That was an improvement from the first quarter, when the company lost 1.1 million subscribers.