Sprint Corp. shed 2 million subscribers and lost $1.6 billion in the second quarter, but its stock price rose on the news.
Investors likely focused on the wireless company’s ability to increase its revenues slightly despite the big drop in customers.
“It’s amazing they were able to accomplish that,” said Berge Ayvazian, an industry consultant at HeavyReading.com.
Total revenues got a boost from the higher average bill each customer pays whether they’re using the company’s Sprint, Virgin or Boost brand of service.
Sprint said its revenues during April, May and June totaled $8.9 billion, up from $8.8 billion a year earlier.
This was Sprint’s last financial report ahead of the July buyout deal with Tokyo-based SoftBank Corp., which now owns 78 percent of Sprint’s stock.
The subscriber losses largely reflected the June 30 shutdown of the old Nextel network it gained in a 2005 merger, and the culling of unqualified customers receiving month-to-month service under a federal cellphone program.
Sprint’s customer losses left it with 53.6 million subscribers, its smallest count since September 2011.
More than 1 million of the defections involved customers with service contracts. At the same time, Verizon Wireless added 941,000 customers under contract, and AT&T added 551,000. Expectations are that T-Mobile will show gains in its contract-customer count when it reports its results next week, despite three years of shedding contract customers.
Sprint has been losing Nextel customers to other carriers since announcing in May 2012 that the old network would shut down June 30 of this year. More than 4 million Nextel customers moved to Sprint’s own network since it began to upgrade that network in early 2011.
Financially, Sprint’s loss of $1.6 billion equaled 53 cents a share. A year ago, the Overland Park, Kan.-based company lost $1.4 billion, or 46 cents a share. Some of the losses involved the Nextel shutdown and other events that did not drain company cash.
Sprint is spending heavily to upgrade its network, pushing total capital investment in the quarter to $1.9 billion. It expects to invest a total of $8 billion this year.