Nextel's 3rd-Quarter Loss Widens as Expenses Climb (Update2)
Bloomberg News
October 15, 1998, 10:44 a.m. ET
Nextel's 3rd-Quarter Loss Widens as Expenses Climb (Update2)
(Adds analyst comment, share activity.)
McLean, Virginia, Oct. 15 (Bloomberg) -- Nextel
Communications Inc. said its third-quarter loss widened as
expenses to expand its wireless-phone network rose and the
company added fewer customers than expected.
The loss widened to $442 million, or $1.56 a share, from
$319 million, or $1.26, a year ago. Results include preferred
dividends of $40.1 million, or 14 cents a share, and a charge of
$46.9 million, or 17 cents, for interest-rate hedging activities.
Nextel shares fell 2 9/16 to 17 1/8 in mid-morning trading.
The company said some customers delayed orders in August to await
a phone introduced in September. In the third quarter, Nextel
added 375,300 subscribers, below the 380,000-to-420,000 range of
analysts, and less than the 400,000 gained in the second quarter.
The stock's fall ''shows investors are subscriber-centric,''
said Jeffrey Hines, an BT Alex. Brown Inc. analyst who rates
Nextel ''strong buy.''
Nextel Chairman and Chief Executive Daniel Akerson said the
company expects to add 350,000 to 375,000 new customers in the
fourth quarter.
That ''would be a strong quarter for us in the fourth,''
Akerson said in a conference call.
Nextel, based in McLean, Virginia, said it now has 2.42
million customers on its digital-wireless network and has added
1.47 million in the past 12 months.
Third-quarter revenue more than doubled to $506.6 million
from $207.2 million a year earlier. Expenses rose to $750.6
million from $463.2 million.
Nextel said its loss before interest, taxes, depreciation
and amortization -- a key measure of performance for debt-laden
wireless companies -- narrowed to $39.5 million. In the U.S., the
company had EBITDA of $7.17 million. The company didn't provide
comparable numbers.
Akerson said cash flow in 1999 could rise to $600 million to
$800 million.
The average revenue per digital customer was about $70, up
from $69 in the second quarter.
Nextel said its network is available in 91 of the top 100
U.S. markets.
--Colleen McElroy (609) 279-4069 and Andrew Brooks (609) 279-4055 |
