From Bloomberg, with info from conference call:
Nextel 4th-Quarter Loss Narrows as Revenue Doubles (Update2)
Bloomberg News
February 23, 1999, 10:24 a.m. ET
Nextel 4th-Quarter Loss Narrows as Revenue Doubles (Update2)
(Adds comments from CFO. Updates share activity.)
McLean, Virginia, Feb. 23 (Bloomberg) -- Nextel
Communications Inc., which provides nationwide wireless phone
services, said its fourth-quarter loss narrowed more than
expected as it signed up more customers and revenue doubled.
Nextel's loss before the payment of preferred dividends
narrowed to $371.3 million, or $1.29 a share, from $779.5
million, or $2.95. Nextel was expected to lose $1.41, the average
estimate of analysts polled by First Call Corp. The estimates
ranged from a loss of $1.05 to a loss of $1.62.
The company added 372,500 U.S. customers to its digital
network in the quarter, which helped more than double sales to
$591.6 million from $275.1 million. Nextel's customers, which are
primarily businesses such as construction companies, are using
their phones more as the average monthly customer bill was $70 --
well above the wireless industry's average of about $50.
''In 1999, we look forward to further expanding our wireless
service offerings and Nextel's appeal to high-end wireless users
by introducing new products and services,'' Dan Akerson, chairman
and chief executive, said in a statement.
Nextel said on a conference call with analysts and investors
that it expects to add 350,000 to 400,000 customers each quarter
in 1999. It also expects the average monthly revenue per customer
to fall slightly to the high $60 range.
McLean, Virginia-based Nextel expects minutes of use on its
network to rise to 16 billion to 17 billion in 1999. That's up as
much as 79 percent from 9.5 million in 1998, Tim Donahue,
president of Nextel, said on the conference call.
Chief Financial Officer Steven Shindler said the higher
phone use will help boost revenue more than 50 percent this year.
''The revenue growth won't be as high of percentage, but we
will be looking at something greater than 50 percent growth in
revenue,'' Shindler said in an interview.
New Phones, New Markets
Shindler said Nextel expects to expand coverage in new
markets this year to give it 5 to 10 million more potential
customers. The company currently provides services in 92 of the
top 100 U.S. cities, and the CFO said the remaining markets will
be at the top of the expansion list.
The company said it has the funds it needs to operate
through 1999.
The company also plans to introduce four new phones this
year, all with data functions that will give users Internet
access and let them send e-mail.
The new markets and new phones, combined with data services,
could help boost customer growth beyond the 1.4 million to 1.6
million new subscribers the company expects this year, Shindler
said.
''There's certainly the opportunity for us to see growth as
we expand into those new products,'' Shindler said.
In the recent quarter, Nextel said it paid $41.6 million, or
14 cents a share in preferred dividends, which resulted in a loss
of $412.9 million, or $1.43.
In the 1997 fourth quarter, Nextel took a charge of $45.8
million, or 17 cents, for the prepayment of debt. It also paid
$16.3 million, or 6 cents, for preferred dividends. That resulted
in a loss of $814.5 million, or $3.18.
--Colleen McElroy (609) 279-4069 and Andrew Brooks (609) 279-4066
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