Nextel Communications Inc. scored a strong farewell quarter as the carrier prepares to be acquired by Sprint Corp. Nextel recorded customer additions and earnings per share ahead of most expectations.
The company’s stock was up slightly after the news to about $32.53 per share.
“Second-quarter results may be Nextel’s last as a standalone company and prove that we continue to aggressively compete in the marketplace while continuing to find the right balance of growth and profitability even as we plan for the merger with Sprint,” said Tim Donahue, Nextel’s president and chief executive officer. “Strong demand coupled with consistent execution will enable us to enter our combination with Sprint from a position of strength. Progress in planning for the merger is on track, and now that shareholders have overwhelmingly approved the merger, we eagerly await final regulatory approvals and an exciting, growth-oriented future with Sprint.”
Nextel flashed with 763,000 new subscribers-550,000 to Nextel and 213,000 to its Boost Mobile offering. The carrier ended the quarter with 17.8 million subscribers, a number that includes 1.7 million Boost Mobile users.
The carrier’s average churn clocked in at 1.4 percent, and its average revenue per user was $68.
Nextel reported a 16-percent jump in revenues compared with the second quarter of last year to $3.8 billion. Analysts polled by Thomson First Call had expected $3.76 billion in revenues. Nextel reported earnings per share in the quarter of 46 cents, up from expectations of 44 cents. However, Nextel’s earnings were no where near its results from last year-partially due to a tax benefit last year as well as the carrier’s $35 million in costs related to the upcoming Sprint acquisition.
