T-Mobile isn’t destroying Sprint after all

Sprint Q4 2013 Earnings

While T-Mobile has clearly gotten into AT&T’s head, many analysts expected that Sprint would be the company that had the most to fear from T-Mobile’s “Uncarrier” initiatives. However, Sprint’s fourth-quarter earnings report shows that the carrier surprisingly added 58,000 postpaid subscribers in Q4 even though the consensus expectation was for a net loss somewhere in the neighborhood of 365,000. Sprint also posted a net loss of $0.26 per share, which was better than the consensus expectation of a $0.32 loss per share, while also posting better-than-expected revenu of $9.14 billion. The company’s full press release follows below.

Sprint reports fourth quarter and full year 2013 results

OVERLAND PARK, Kan. (BUSINESS WIRE), February 11, 2014 - Sprint Corporation (NYSE:S) today reported operating revenue, which grew year-over-year to more than $9.1 billion for the fourth quarter and to $35.5 billion for the full year 2013. Operating loss was $576 million in the fourth quarter, a 22 percent year-over-year improvement. Quarterly Adjusted EBITDA* of $1.15 billion improved nearly 40 percent year-over-year. Annual Adjusted EBITDA* of $5.4 billion improved by 13 percent.

“In 2013 Adjusted EBITDA* and Sprint platform wireless revenues grew significantly while we made investments to improve network performance and expand 4G LTE to more than 200 million people,” said Dan Hesse, Sprint CEO. “As we roll out Sprint SparkTM and create innovative offers like Sprint FramilySM, we are building a foundation for future success.”

Sprint Platform Subscriber Net Additions of 682,000 and Record Smartphone Sales Mix

Sprint ended the year with 53.9 million Sprint platform subscribers – its highest level ever – after adding 58,000 postpaid subscribers, 322,000 prepaid subscribers and 302,000 wholesale and affiliate subscribers in the fourth quarter. Sprint sold 5.6 million smartphones in the fourth quarter and 20.5 million smartphones for the year with smartphone sales mix reaching 95 percent for postpaid and 66 percent for prepaid in the quarter.

Net Income and Operating Loss Improve Year-Over-Year; Adjusted EBITDA* Up Nearly 40 percent Year-Over-Year

Quarterly net loss was $1 billion in the fourth quarter as compared to a loss of $1.3 billion in the fourth quarter of 2012. Operating loss for the quarter was $576 million as compared to an operating loss of $738 million in the fourth quarter of 2012.

Quarterly Adjusted EBITDA* of $1.15 billion improved nearly 40 percent year-over-year as growth in Sprint platform service revenue, network savings resulting from the Nextel platform shutdown and lower net subsidy expense were partially offset by the loss of Nextel platform revenue and the consolidation of Clearwire’s results.

LTE Coverage Now Available to More than 200 Million People; Sprint Spark TM Now in 14 Markets

Sprint currently has nearly 33,000 Network Vision sites on air, an increase of more than 24,000 sites over the last 12 months. LTE coverage is now available to more than 200 million people. The company continues to expect that by the middle of this year LTE coverage will reach 250 million people and the voice/3G network modernization deployment will be complete.

During the fourth quarter the company unveiled Sprint Spark – a combination of advanced network and device technology with the potential to surpass wireless speeds of any U.S. network provider, capable of delivering 50-60 Megabits per second peak speeds today with potential speeds three times as fast by late 2015. Sprint Spark leverages the company’s 800MHz, 1.9GHz and 2.5GHz spectrum together with devices offering tri-band capability and high-definition voice1.

Sprint plans to deploy Sprint Spark in about 100 of America’s largest cities during the next three years. By the end of this year, 100 million Americans are expected to have Sprint Spark coverage. Today, Sprint Spark launches in Philadelphia and Baltimore and, with the recent launch in Kansas City, is currently available in 14 markets including New York, Los Angeles and Chicago. Ten Sprint Spark-capable devices are currently available, including the recently updated Samsung Galaxy S® 4, Samsung Galaxy MEGA™, HTC One® max, LG G Flex and NETGEAR® Zing Mobile Hotspot™.

Sprint Framily Pricing Program Lets Customers Decide

Earlier this year, Sprint introduced Sprint Framily, a new pricing program available to new and existing customers that lets consumers decide who they consider family. With Sprint Framily, the more people added to the group (up to 10 phone lines), the greater the savings for everyone on the plan.

For one line of service, new Sprint customers pay $55 per month per line for unlimited talk, text and 1GB of data while on the Sprint network. For each additional new Sprint customer who joins the Framily group, the cost per person goes down $5 a month up to a maximum monthly discount of $30 per line. With a group of at least seven people, each customer gets unlimited talk, text and 1GB of data while on the Sprint network for $25 per month per line (pricing excludes taxes and surcharges).

All members of the group can customize their plan and for an additional $20 per month per line, Framily members can buy up to unlimited data plus get a new phone every year. Each account can be billed separately.

Sprint Garners Third-Party Recognition

Sprint received notable awards in the fourth quarter. In particular, CEVA Logistics, one of the world’s leading supply chain companies, named Sprint as Technology Supplier of the Year. Pinsight Media+, Sprint’s mobile media company, received the 2013 North American Mobile Advertising Product Leadership Award from Frost & Sullivan, and Dan Hesse was namedCorporate Responsibility Magazine’s Lifetime Achievement Award winner for 2013. Last month, Compass Intelligence named Sprint the most “Eco Focused Wireless Carrier,” and Sprint was the only U.S. telecommunications company to be named an Efficiency Leader to the 2014 National Capital Leaders Index by GreenBiz Group and Trucost. Additionally, for the second year in a row, Sprint was rated 16th in Chief Executive Magazine’s Best Companies for Leaders list.

Forecast

The company expects 2014 Adjusted EBITDA* to be between $6.5 billion and $6.7 billion.

The company expects 2014 capital expenditures of approximately $8 billion.

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