Nextel Communications Inc. surpassed analysts’ expectations and set a company record reporting 646,000 net customer additions during the third quarter of this year and ending the quarter with 12.3 million total customers.
The carrier noted that its reported customer growth did not include the 102,000 net additions during the quarter by its Boost Mobile L.L.C. subsidiary, which ended the quarter with 245,000 total subscribers.
Further bolstering Nextel’s quarterly results was a reported 1.4-percent customer churn, which the carrier said was its lowest since 1997 and down substantially from the 2 percent the carrier reported during the third quarter of last year, and average revenue per user that remained steady year-over-year at $71.
Analysts expected Nextel to report approximately 500,000 net customer additions, 1.8 percent customer churn and $69 in ARPU during the quarter.
Financially, Nextel posted mixed results with a 27-percent increase in total revenues from $2.3 billion during the third quarter of 2002 to $2.9 billion this year offset by a drop in net income available to shareholders from $526 million last year, or 55 cents per diluted share, to $346 million this year, or 32 cents per diluted share. Nextel’s management attributed the shortfall to debt retirement charges during the quarter.
Tom Kelly, Nextel’s executive vice president and chief operating officer, added that more than one-third of its customer base had used the carrier’s recently launched Nationwide Direct Connect service during the past 60 days, and the carrier will begin launching a new lineup of handsets expected to be based on Motorola Inc.’s “Falcon” platform beginning next week.
Following the strong quarterly results, Nextel raised its full-year 2003 guidance from $600 million in free cash flow to more than $1 billion, earnings per share from at least $1 per share to at least $1.15 per share, operating income before depreciation and amortization from $3.9 billion to at least $4.1 billion, and net subscriber additions excluding its Boost subsidiary from 1.9 million customers to approximately 2.2 million subscribers.
