Sprint Nextel profits drop sharply on costs

US wireless provider Sprint Nextel's second-quarter profits dropped sharply, but it still beat Wall Street estimates and had positive news on subscriber growth for the first time in almost a year, an Associated Press report said.

The Associated Press report said company earned $19 million during the three months ending June 30, compared with $370 million, during the same period a year ago.

Revenue during the quarter rose about 2% from $10 billion to $10.16 billion, missing Wall Street's estimate of $10.2 billion, the report said.

Analysts, many of whom had low expectations for the quarter, expressed cautious optimism following the company's earnings, although some were still concerned that Sprint Nextel could be vulnerable to competition, the report added.

The report said the company, which has struggled to keep up with rivals AT&T and Verizon Wireless, added 373,000 subscribers during the quarter, including 16,000 postpaid customers, subscribers who pay a variable bill at the end of the month and are considered the most valuable. It was the first positive numbers in the category in almost a year.

The company reiterated its guidance of between $41 billion and $42 billion in revenue and operating income before taxes and depreciation of between $11 billion and $11.5 billion. Analysts are expecting revenue of $41 billion, the report further said.