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Technology Stocks : NEXTEL -- Ignore unavailable to you. Want to Upgrade?

To: p friend who wrote (7958)	10/15/1998 12:39:00 PM
From: Anthony Wong	Respond to of 10227

11:54 NEW YORK (Dow Jones)--Shares of Nextel Communications Inc. (NXTL) plunged to a new 52-week low after the company reported third-quarter results in which domestic operating cash flow was positive for the first time, but customer growth was slower than expected. For the first time, the McLean, Va., wireless communications company reported a smaller number of new U.S. customers than it had the previous quarter. It also said during a conference call that fourth-quarter growth could be slower still. Investors were surprised and disappointed by the domestic subscriber numbers and by higher than expected capital spending forecasts for 1999, analysts said. The bad news eclipsed several strong elements in the company's earnings, including rising customer bills, stable customer turnover and positive operating cash flow in its U.S. business. "In this market people are focused on the negative," said Bear, Stearns & Co. analyst David Freedman. The earnings report drove Nextel shares to a 52-week low of 15 3/8 earlier, surpassing the previous 52-week low of 15 5/8 that was reached Oct. 8. Recently shares were down 3 5/8, or 18.4% to 16 1/16 on Nasdaq volume of 5 million, compared to average daily volume of 2.9 million. The company reported a net loss of $401.9 million, or $1.56 a share, including a non-cash charge of $46.9 million, or 17 cents, from losses on an interest rate hedge. In the year-ago period, the company lost $306.1 million, or $1.26 a year ago with fewer shares outstanding. Excluding the charge, the company lost $1.39. The consensus of analysts surveyed by First Call Corp. was that the company would lose $1.36. Revenue more than doubled to $506.6 million from $207.2 million a year ago. The net loss from domestic operations was $286.3 million, or $1.01 per share. Domestic operating cash flow was $7.2 million. Some analysts expected positive domestic operating cash flow in the third quarter, while others thought the change was more likely in the fourth quarter. Nextel added 375,300 U.S. subscribers in the third quarter, down from more than 400,000 in the second quarter. Company officials said in the "best case" fourth quarter subscriber growth would be flat with the third quarter. It could dip, they said. The company said it expects to add 350,000 to 400,000 domestic subscribers a quarter for the next few quarters. "Investors are proving to be subscriber-sensitive above all else," said BT Alex Brown Inc. analyst Jeffrey Hines. Nextel and AT&T Corp. (T) are likely to end up with the industry's strongest third quarter subcriber growth, Hines said. AT&T, the largest wireless carrier, serves both consumers and businesses, while Nextel focuses exclusively on the business market. Hines said investors shouldn't have been terribly surprised to see subscriber growth slip because the company introduced a much-anticipated new phone late in the quarter and customers seemed to hold off purchases while they waited for the new model. When the new, smaller phones came on the market, the company didn't have enough of them to meet demand, which also reined in sales. "That problem has been solved," Chief Financial Officer Steve Schindler told Dow Jones in an interview after the earnings release. Schindler attributed the shift to positive U.S. operating cash flow to a combination of slower subscriber growth, which reduces sales costs, overall cost-cutting efforts, stability in customer turnover and strong growth overall. It is too early to tell what adjustments analysts will make to their fourth quarter and 1999 earnings projections, Schindler said, but the company expects results to be generally in line with forecasts. (MORE) DOW JONES NEWS 10-15-98 11:54 AM

To: p friend who wrote (7958)	10/15/1998 12:53:00 PM
From: John F. Dowd	Read Replies (1) \| Respond to of 10227

Dear p friend: That is an excellent point and it is too bad that Schindler didn't make a more emphatic point of this. This could augur well for stronger comparison than anticipated in the 4th qrtr. which because of the bus. orientation is normally a little weaker than the rest. JFD

To: p friend who wrote (7958)	10/15/1998 11:04:00 PM
From: Frederick Smart	Respond to of 10227

p friend >>Only 375,000 new subscribers! This is a great number. The i1000 is clearly the problem. Every current and potential customer who would have ordered a phone had to consider waiting for the i1000 and many would have seen the advantage of waiting. It would seem that doing 375,000 in the 4th quarter would be very good as this is a quarter short on days for "doing business." I don't see a problem in subscriber growth and am glad for the buying opportunity.>> Exactly!! We were right there holding off i600 purchases as we waited for the i1000. Granted, the i1000 is more expensive, but we are finding the reception among our user base very strong. The quality of the i1000 is outstanding. More volume, clearer, crisp, etc. The hands free stuff is fantastic - will bump up cellular minutes by default. Nextel needs to let go to grow more rapidly. Start by treating their users as communities that customers populate. Instead, I get the distinct impression that they regard Business Network users as "theirs". This is the farthest thing from the truth. Nextel is the purest extention of the internet model to the street I have come across. DC makes it so. It better than email. Regular phone calls are great, but when you are working on something and want that intimacy and trust that goes with contact and being connected, there is nothing better than Nextel.