CORRECTED – UPDATE 3-Sprint subscriber losses narrow but shares fall

(Corrects second paragraph to reflect that Sprint is the No. 3
US mobile service, not No. 4)

* Q3 SHR Loss $0.30 vs Street view loss $0.28

* Q3 Rev $8.15 bln vs Street view $8.04 bln

* Loses 107,000 postpaid subs, analyst view:loss 173,000

* Sprint shares down 4.4 pct

Corrected repetition follows
(Rewrites, adds executive quote, share price update)

NEW YORK, Oct 27 (BestGrowthStock) – Sprint Nextel (S.N: ) posted
improving customer numbers on sales of its EVO smartphone from
HTC Corp (2498.TW: ), but its shares fell 4.4 percent as some
investors had hoped for better.

The No. 3 U.S. mobile operator posted a third-quarter net
loss of 107,000 valuable postpaid contract customers compared
with the average expectation for a loss of 173,500 customers
from six analysts contacted by Reuters, and losses of 801,000
customers a year earlier.

Pacific Crest analyst Steve Clement said that while the
numbers were an improvement for Sprint, some investors had
hoped that it would add postpaid subscribers.

“There may have been some disappointment relative to
expectations that had risen late in the quarter” Clement said.

Sprint shares had rallied 20 percent since late August in
expectation of improved results.

The numbers also looked weak in comparison to Sprint’s
biggest rivals, which reported their results last week.

Verizon Wireless added 584,000 postpaid customers in the
quarter and AT&T Inc (T.N: ), the No 2 U.S. mobile service and
exclusive U.S. provider for Apple Inc (Read more about Apple stock future.)’s (AAPL.O: ) iPhone, added
745,000 subscribers.

Sprint, which has been losing postpaid customers for years,
expects postpaid, prepaid and total subscriber numbers to
improve in the fourth quarter compared with the third quarter
but it did not give a specific target.

One bright spot for the company was a slight revenue
increase to $8.15 billion from $8.04 billion a year earlier and
compared with the average analyst expectation for $8.04
billion, according to Thomson Reuters I/B/E/S.

It was the company’s first revenue increase that wasn’t
caused by an acquisition since 2007. Hudson Square analyst Todd
Rethemeier said the increase was related to phone sales as well
as service revenue, Sprint’s core business.

Sprint Chief Executive Dan Hesse said his company has an
advantage as the first U.S. operator to sell phones based on
fourth-generation (4G) high-speed wireless services as even its
biggest rival Verizon wireless will depend on third generation
(3G) phones until next year.

But Hesse acknowledged, “We know they’ll be on our heels
pretty quickly.”

The executive said Sprint is in talks with its Clearwire
Corp (CLWR.O: ) venture’s options for new funding to expand its
network, which Sprint uses to offer 4G services. One option
could be for Sprint, which already owns about 55 percent of
Clearwire, to invest more in the venture.

Sprint’s net loss widened to $911 million, or 30 cents per
share from $478 million, or 17 cents per share in the same
quarter a year ago. The latest quarter included a massive
tax-related charge and the loss was 2 cents wider than
consensus estimates of 28 cents per share, according to Thomson
Reuters I/B/E/S.

Hesse said a big factor hurting Sprint’s profit is its
support for two separate networks; its own original CDMA
network and the iDen network it acquired through its Nextel
acquisition in 2005.

As a result Sprint is currently examining ways that it
could combine both networks in what could be a four-year
project that starts to help its profit margins in 2012. Hesse
said recently that Sprint should make a decision this quarter.

“The primary driver is cost reduction,” he said.

Sprint shares were down 4.4 percent at $4.56 in heavy
premarket trading.
(Reporting by Sinead Carew; editing by Derek Caney, Dave
Zimmerman)

CORRECTED – UPDATE 3-Sprint subscriber losses narrow but shares fall