MCLEAN, Va.-Nextel Communications Inc. reported a second-quarter net loss of $531.3 million, or $1.94 per share, compared with a $261.6 million loss for the corresponding period last year.
Total revenue for the quarter was $421.4 million, up from $145.9 million a year ago and above analysts’ expectations of $396.5 million, attributed mainly to Nextel’s second-quarter growth in both subscribers and monthly average revenue per unit.
The company gained a record 400,600 domestic digital subscribers, while ARPU rose to $69, up from $66 last quarter and $63 for the second quarter last year. The company claims 2 million digital units total, an increase of 227 percent in the last year.
Domestic operating cash flow loss (or earnings before interest, tax, depreciation and amortization) totaled $53.3 million, compared with $94.8 million in the first quarter, a 44-percent decrease.
The company’s net loss was greater than analysts’ expectations, attributed to a one-time charge of $133.2 million to pay off some debt early.
Other results, such as ARPU, subscriber growth churn and operating cash flow all exceeded analysts’ expectations. Monthly churn fell from 1.7 percent in the first quarter to 1.6 percent. The $69 ARPU figure was well above analysts’ expectation of $66, and EBITDA loss of $53.3 million was well below analysts expectations of $86.1 million.
“Usually, in the wireless industry, a company which has enjoyed significant growth in its customer base, as we have, does not see its (ARPU) increase as well,” said Dan Akerson, Nextel chairman and chief executive officer. “Strong demand for our differentiated approach to offering wireless services has driven system usage up 46 percent during the quarter to more than 2.2 billion minutes.”
Security analysts at Toronto Dominion expect subscriber growth going forward throughout the year to remain relatively flat and expect “rapid progress” toward reaching operating cash flow profits. At press time, Nextel stock was at $31.
