Sprint Reports Widening Loss

Just a day after announcing it will stream live NFL games, Sprint reports a widening loss

Sprint Nextel Corp. (NYSE:S) said Friday that it swung to a third-quarter loss of $326 million, or 11 cents a share, from a profit of $64 million, or 2 cents a share, in the year-ago period. Adjusted earnings, before amortization, for the telecommunications giant came in at the break-even level, compared to a year-earlier 23-cent profit. Net operating revenue for the three months ended Sept. 30 fell 12% to $8.82 billion. On average, Wall Street analysts forecast earnings of 1 cent a share on revenue of $8.85 billion, according to a FactSet Research survey. The company said it expects continued pressure on post-paid subscribers in the fourth quarter, but sees gross adds stabilizing and the churn rate remaining consistent with the third quarter.

Sprint Nextel said it's amended the terms of its credit agreement, with a $4.5 billion revolving credit facility replacing a $6 billion one. The company also paid down $1.0 billion of the outstanding loan amount under the amended credit agreement. The new agreement will remain until 2010 and up to $3 billion may be used to secure letters of credit. The new terms reduce the ratio of indebtedness to earnings, add domestic subsidaries as guarantors, increase the interest rates and prohibit dividends unless certain conditions are met. The company simultaneously amended its $750 million credit agreement with Export Development Canada to incorporate the same changes.

Sprint has now fallen woefully behind both Verizon (NYSE:VZ) and AT&T (NYSE:T). Verizon has the land line network to buffer it and AT&T has the iPhone. Lost in all this is error of Sprint not being the first to offer the gPhone from Google (NASDAQ:GOOG).