Nextel comments on no merger partner
(from Yahoo! thread)
by: NotJordan (31/M/Chicago, IL)
15436 of 15440
By Jessica Hall
NEW YORK, Feb 23 (Reuters) - Nextel Communications Inc. <NXTL.O>, which has been seen as a potential takeover candidate, said it does not
need a merger partner to thrive in the competitive and quickly consolidating wireless telephone market.
"We are certainly building the company to do everything on our own. We think we've got all the key ingredients to do that," Nextel Chief Financial
Officer Steve Schindler said in a telephone interview after the release of the company's fourth-quarter earnings report.
"We're in a very strong position to be one of the dominant national and international wireless carriers. ...We certainly don't need a partner to drive
the results we're expecting to drive, not only in 1999 but in future years," Schindler said.
Shares of Nextel have risen about 30 percent this year amid speculation the wireless telephone company may be acquired. On Tuesday, shares of
Nextel fell $1.19 to $30.75 after its fourth-quarter earnings failed to meet Wall Street expectations.
Nextel has a lucrative customer base since it mostly targets business customers instead of consumers. The company is also one of the few
carriers, besides AT&T Corp. <T.N> and Sprint PCS <PCS.N>, that has a national wireless network.
"Strategically, are there certain things we'd benefit from in having someone come in in an alliance arrangement or other arrangement? Yeah, there
are obviously things that could potentially enhance our position....but it's not something we are in need of," Schindler said.
Instead, Nextel is focused on building its business internally.
McLean, Va.-based Nextel said it expected to add 350,000 to 400,000 domestic subscribers per quarter in 1999. In the fourth quarter of 1998,
Nextel added 372,500 domestic subscribers, beating its own internal forecast of 350,000 subscribers.
The company expects to keep average monthly revenues per unit in the high $60s.
Average revenues were $70 a month during the fourth quarter. That was stronger than Nextel had expected as average revenues typically ease in
the fourth quarter because there are more holidays, fewer work days and generally less business calling volume.
Nextel expects to keep its customer turnover, or churn, at 2 percent or less in 1999. Customer turnover was 2 percent in the fourth quarter and 1.8
percent for the full year 1998.
Capital spending per net subscriber addition fell 22 percent in 1998 to $1,250 from $1,600. Nextel expects its costs per subscriber will fall by 10
percent to 15 percent in the major cities where it has already built its wireless network.
Schindler also reiterated Nextel expects to be cash flow positive on a consolidated basis, including its international operations, in the first quarter
of 1999. The international business, on its own, will be cash flow positive in the first quarter of 2000. The company as a whole will be net income
positive in 2001 or 2002, Schindler said.
Earlier on Tuesday, Nextel posted a fourth-quarter loss of $412.9 million, or $1.43 per share, compared with a loss of $841.5 million, or $3.18, in
the year-ago period.
The loss exceeded Wall Street expectations. Analysts had forecast the company would lose $1.41, according to First Call Corp., which tracks
earnings estimates.
Fourth quarter revenues climbed to $591.6 million from $275.1 million.
Posted: Feb 23 1999 2:22PM EST as a reply to: Msg 15412 by bd711 |
