Shares of Sprint-Nextel (S) are down 9 cents, or 3.5%, at $2.37 after the company this morning reported a deeper-than-expected Q4 loss per share, and saw churn among its subscribers rise slightly, year to year, and reiterated an intention to raise $5 billion to $7 billion more in additional financing by the end of next quarter.
The company was marked by the addition of�1.6 million net subscribers, the best boost since 2005, as it offered Apple’s (AAPL) iPhone for the first time. Sprint said 40% of iPhone units were sold to customers who were new to Sprint.
That included 539,000 net additions of postpaid subscribers. Sprint ended the quarter with 55 million customers, including 33 million on postpaid plans and 14.8 million on prepaid plans, and 7.2 million wholesale customers.
Revenue in the three months ended in December rose 5%, year over year, to $8.77 billion, helped by a 7% rise in wireless services revenue.
Analysts had been modeling $8.69 billion.
The company reported a net loss per share of 43 cents, worse than the 37 cents analysts had been expecting. That loss includes 8 cents a share of pre-tax charges for impairment of property and plant, payments to Clearwire (CLWR), and severance costs, the company said.
Adjusted operating profits, or “OIBDA,”�fell 36%, year to year, to $668 million, in large part because of the cost of subsidizing the pricier iPhone for customers.
Churn, the defection of existing subscribers, rose year over year to 1.98% from 1.86% a year earlier and from 1.91% in Q3, the company said.
The company’s free cash flow of $257 million fell 72%, year over year, but was a big improvement from the loss of almost the same amount in Q3, thanks to favorable working capital changes and a one-time payment from the FCC, the company said.
During a conference call with analysts, Sprint CFO Joe Euteneuer said that the company considers 2012 an “aggressive investment year,” with plans to spend $6 billion to build out its “Network Vision” network upgrade. He said the timing of the company’s OIBDA throughout the year would be heavily dependent on “the timing of the launch of any subsequent versions of the iPhone,” given the weight that subsidies have on the company’s results. Indeed, the company’s wireless equipment net subsidy cost rose 42% from Q3′s level, to $1.7 billion, which it attributed to the iPhone.
Regarding capital financing, Euteneuer remarked, “We believe we have a clear runway to allow us to continue the investments in the iPhone and in Network Vision. I previously gave you guidance that we would be raising approximately $5 billion to $7 billion, excluding the Clearwire investment we announced in Q4. And this remains our intention.”
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