Sprint Nextel Corp. on Wednesday posted a third-quarter profit but missed Wall Street’s expectations in its first quarter since Sprint’s $35 billion purchase of Nextel closed in August, creating the nation’s No. 3 cell-phone carrier.
Quarterly income amounted to $516 million, or 23 cents per share. Setting aside unusual items, the Reston-based company’s profit was $655 million, or 29 cents per share, missing the average view of 38 cents per share from analysts surveyed by Thomson Financial.
Net operating revenue totaled $9.34 billion, well below analysts’ consensus target of $10.97 billion.
The company’s third-quarter results include only Sprint for the first 43 days of the quarter, and combined Sprint and Nextel results for the rest of the quarter. They also include results from former Sprint affiliate US Unwired Inc. beginning Aug. 12, the day it was acquired by Sprint Nextel.
On a pro-forma basis, which combines Sprint’s and Nextel’s results for all of the third quarters of both 2004 and 2005, Sprint Nextel reported earnings of 493 million, or 16 cents per share, in the latest quarter, compared with a loss of $1.84 billion, or 64 cents per share, in last year’s third quarter. Pro-forma revenue rose 8 percent to $11.2 billion in the latest quarter.
In last year’s third-quarter, Sprint posted a loss of $1.91 billion, or $1.32 per share, and adjusted earnings of $368 million, or 25 cents per share, on revenue of $6.92 billion.
Looking ahead, the company forecast full-year pro forma revenue of about $44 billion, up about 8 percent from last year. Wireless revenue is seen rising 12 to 13 percent, long distance revenue is expected to drop 6 percent, while local revenue is seen edging up slightly from year-ago levels.
The company also said it expects to add some 1.4 million direct subscribers in the fourth quarter.
