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Earnings Watch
Nextel Posts $1.3B 2Q Profit


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Nextel Communications Inc.
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_____Nextel Headlines_____
Nextel Reports Big Rise In Profit (The Washington Post, Jul 22, 2004)
Nextel Must Pay at Least $3.2 Billion for Airwaves (The Washington Post, Jul 9, 2004)
FCC May Charge Nextel More (The Washington Post, Jul 8, 2004)
Nextel Spectrum Swap Nears FCC Decision (The Washington Post, Jul 7, 2004)
More Company News
By Yuki Noguchi
Washington Post Staff Writer
Wednesday, July 21, 2004; 12:54 PM

Buoyed by a new crop of customers and increased customer loyalty, Nextel Communications Inc. announced the latest in a series of good financial results today. The Reston-based mobile-phone company posted its ninth consecutive profitable quarter and an increase in revenue.

Nextel's reported a profit of $1.3 billion ($1.12 per diluted share) on revenue of $3.3 billion during its second quarter ended June 30. The results compare to income of $281 million (27 cents a share) on revenue of $2.6 billion during the same period a year ago. Part of the gain in the current quarter stemmed from a one-time tax gain.

But the company also added 546,000 new customers during the quarter, for a total of 13.9 million subscribers.

"I am optimistic that we will maintain this momentum going forward," Nextel chief executive Timothy Donahue said in a conference call this morning.

Nextel's results led mixed results in the rest of the industry. Sprint Corp., a larger carrier based in Kansas City, added 897,000 wireless subscribers in the quarter. Those wireless gains helped offset declines in Sprint's long-distance business.

AT&T Wireless, based in Redmond, Wash., posted a dramatic, 73 percent decline on its net income, on slightly higher revenue. The troubled AT&T Wireless, which had been losing subscribers earlier this year, has agreed to merge with Cingular Wireless, in a deal that could close later this year.

Cingular Wireless is expected to post its financial results later today.

Nextel had a very busy quarter.

Earlier this month, it won a fierce regulatory battle and gained approval to take over valuable airwaves that are critical to its future. Those airwaves will enable the company to carry more calls and more high-speed data traffic.

During the conference call, Nextel executives said they would have to review the details of the Federal Communications Commission's $4.8 billion proposal before deciding to accept the deal. But in discussing the proposal, Donahue said, "We applaud their decision."

The company's expenses increased, in part to fund its current, yearlong trial of a new high-speed Internet service in Raleigh, N.C. It expanded Boost Mobile, its service targeting the youth market to seven new cities, including the Washington area.

It also launched new services including an international walkie-talkie service that allows people to communicate with the push of a button between Canada, the United States, and four countries in South America. In addition, the company reduced its debt by $700 million during the quarter, to $9.2 billion.

The company's stock price has shot up in the last year from about $6 a share to about $26. Shares of Nextel were down 70 cents at $25.30 in midday trading. Home

© 2004 The Washington Post Company

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