Financial Performance

Sprint Loss Widens Amid Drop in Phone Subscribers

The company's second-quarter results "underline how badly Sprint needs a merger with T-Mobile.”
Matthew HellerNovember 4, 2019

Sprint reported lower-than-expected quarterly earnings and another drop in postpaid phone subscribers on Monday as its mega-merger with T-Mobile remained in limbo.

For the second quarter, the company posted a loss of 7 cents per share down from 5 cents a year earlier but worse than the Wall Street consensus estimate of a loss of 2 cents per share. It has now reported losses for four straight quarters.

Sprint added 273,000 postpaid wireless lines but net postpaid phone subscribers — its most lucrative phone connections — declined by 91,000. Rivals T-Mobile and Verizon both added postpaid phone customers in their most recent quarters.

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“I am proud of the resiliency of the Sprint team as they work to deliver results in a challenging environment,” CEO Michel Combes said in a news release. “However, I remain convinced that merging with T-Mobile and building one of the world’s most advanced 5G networks is the best outcome for all consumers, employees, and shareholders.”

Sprint shares fell 3% to $6.11 in trading Monday. “The results underline how badly Sprint needs a merger with T-Mobile,” Barron’s said.

The $26 billion deal has received regulatory approval but antitrust litigation from 16 state attorneys general have kept it on ice. The cases are set to go to trial next month.

Sprint, which has told regulators it is “not on a sustainable competitive path,” lost 28,000 postpaid phone customers in the first quarter and 34,000 such connections in the second quarter of 2018.

For this year’s second quarter, it also shed 207,000 prepaid phone customers, for a combined loss of 298,000. Postpaid average revenue per user dropped 4% year over year to $42.30 due to a higher mix of data device connections, which generally bring in less than high-value phone subscribers.

The company “has lost subscribers as [the] merger … moves through the regulatory approval process more slowly than expected,” The Wall Street Journal said.

Revenue fell to $7.8 billion in the latest period from $8.4 billion a year earlier amid headwinds from Sprint’s plans to reimburse the government for subsidies it improperly collected for low-income subscribers.