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To: Bill Harmond who wrote (14502)	10/24/2002 9:53:15 AM
From: stockman_scott	Respond to of 57684

Nextel Posts Profit on Strong Demand Thursday October 24, 8:32 am ET RESTON, Va. (Reuters) - Nextel Communications Inc. (NasdaqNM:NXTL - News), the fifth-largest U.S. wireless telephone company, on Thursday posted a profit for the second quarter in a row as revenue jumped on by strong customer demand for its walkie-talkie-like service. Nextel said it was particularly helped by growth in business from the construction and government sectors. Since late last year, the wireless industry has been seeing a slowdown in customer demand and an increase in competition after years of frenetic gains. Half of Americans now own cell phones, making it more difficult to add new subscribers. However, Nextel has continued to post strong quarterly results despite a loss of investor faith in the industry, due to its devoted following for Direct Connect, a service similar to a walkie-talkie used by technicians, construction crews and other professionals. The company said it added 480,000 new customers to its service in the United States in the third quarter, in line with its statement earlier this month that it added 475,000 "plus something" in the latest period. It ended the quarter with about 10.1 million customers. Nextel's strong customer growth lies in direct contrast to customer losses reported earlier by Cingular Wireless (NYSE:SBC - News; NYSE:BLS - News) and Sprint PCS Group (NYSE:PCS - News), the nation's No. 2 and No. 4 wireless operators. On Wednesday No. 3 AT&T Wireless Services Inc. (NYSE:AWE - News) met the high-end of analysts' expectations for new customers. The largest wireless operator Verizon Wireless (NYSE:VZ - News; London:VOD.L - News) is expected to post its results on Friday. Reston, Virginia-based Nextel reported third-quarter net income of $383 million compared with a loss of $150 million. Income available to common stockholders, including special items, was $526 million, or 55 cents a diluted share, compared with a loss of $209 million, or 27 cents a share a year ago. Special items included a gain of $401 million, or 44 cents a share, for retirement of debt and preferred stock and a charge of $3 million to reflect a decline in value of some investments. Excluding the special items, Nextel's income available to common stockholders was $128 million. Revenue rose 26 percent to $2.3 billion as average monthly revenue per customer held steady at $71 and customer turnover remained the lowest in the industry. The company said it retired about $1.5 billion in debt and preferred stock during the third quarter. So far this year, it has retired $2.6 billion in debt and preferred stock. Nextel said its earnings before interest, taxes, depreciation and amortization (EBITDA) or operating cash flow rose 67 percent to $878 million. "Nextel is improving back-office systems, scaling network expenditures, and keeping our network quality and customer satisfaction at high levels," said Tim Donahue, chief executive of Nextel, in a news release. Shares of Nextel closed at $10.20 on Nasdaq on Wednesday.