Who and what analysts that made up the 550,000 target vs the 540,000 actual new customers added...This appears to be the reason for the drop....
Nextel Shares Drop Nearly 9
Percent
Oct 5 12:58pm ET
NEW YORK (Reuters) - Shares of Nextel
Communications Inc. (NXTL.O) dropped nearly 9
percent on Thursday after the wireless telephone
company said it added slightly fewer domestic
subscribers in the third quarter than Wall Street
had expected.
Reston, Va.-based Nextel said it added more
than 540,000 subscribers in the United States,
below some analysts forecasts of 550,000 new
subscribers.
Shares of Nextel fell $4 per share, or about 9
percent, to $39-13/16 in early afternoon trading
on Nasdaq.
Nextel had averaged 550,000 net subscriber
additions in the first two quarters of this year.
Nextel Chief Executive Tim Donahue had said in
July he saw ``no reason why we can't continue to
add customers at that rate.''
Other wireless carriers such as Sprint PCS
Group (PCS.N) and Dobson Communications
Corp. (DCEL.O) recently warned that their third
quarter subscriber growth would fall short of Wall
Street expectations.
Nextel, which serves mostly high-spending
business customers rather than consumers, said
its customer turnover, or churn, remained at
about 2 percent in the third quarter. It said its
average monthly revenue per subscriber met or
exceeded the $74 average seen in the second
quarter.
Nextel said it has made ``significant progress'' in
its wireless data operations. It said it had more
than 200,000 data subscribers on its Nextel
National Network by the end of September.
The company, which industry sources said has
been in talks to combine its operations with
AT&T Corp.'s (T.N) wireless unit, plans to
release its third quarter results later this month.
A combination with AT&T Wireless would give
Nextel access to AT&T's extensive wireless
spectrum licenses and deep pockets to expand
its network and participate in the upcoming
auctions for U.S. wireless licenses, analysts
said.
Nextel has declined to comment about the
rumored negotiations with AT&T. It had said in
July it was weighing partnerships with various
U.S. and international telephone companies and
Internet-related firms. It also said it may enter the
upcoming auctions for U.S. wireless licenses
with a partner.
Nextel said it has doubled its frequency position
in the top 100 U.S. markets since it launched its
first digital service in 1996. Nextel now has more
than 22 megahertz of wireless frequency in the
700-, 800- and 900-MHz frequency bands.
``While there are limitations on using 700-MHz
channels, this spectrum increases our flexibility
going forward and we remain quite positive on
our ability to continue to offer innovative wireless
communications solutions aimed primarily at
business users,'' Donahue said in a statement.
``While the wireless industry is certainly
becoming more competitive for low cost
consumer wireless services, business growth
continues to be our focus,'' Donahue said. More
than 90 percent of Nextel's monthly service bills
are paid by a business. |
