Sprint Nextel's profit rose in the fourth quarter of 2006, but the Reston wireless company continued to lose high-paying customers, executives said yesterday.
The company reported quarterly earnings of $261 million (9 cents a share), compared with $195 million (7 cents) for the last quarter of 2005. For all of 2006, profit was $1.33 billion (45 cents), down from $1.78 billion (87 cents) in 2005.
Sprint, the nation's third-largest wireless provider, enjoyed nearly 7 percent revenue growth during the quarter, thanks largely to the acquisition of affiliates like Nextel Partners. It signed up 742,000 new customers. But it lost 306,000 subscribers from its most coveted category: monthly or "post-paid" customers, who tend to spend more.
Most of the losses came from Nextel's "push-to-talk" network, a walkie-talkie-like service that Nextel was well known for before it merged with Sprint in 2005. Sprint officials warned of the losses in a January statement, which also said the company would cut 5,000 jobs, a process now underway.
"We acknowledge that we have much work to do," chief executive Gary D. Forsee said in a conference call with analysts. "I believe the right plans are in place. The management is focused on the right things, and there is an intense accountability across the organization to deliver performance."
Chief Financial Officer Paul Saleh said in an interview that the loss of monthly subscribers was slowing, in part because Sprint is signing up fewer people with poor credit ratings. The company also is striving to handle customer complaints with one phone call, he said, and to reduce the number of dropped and blocked calls on its push-to-talk models.