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Customers avoid Sprint in 1Q as suitors circle

By Peter Svensson

Associated Press

Published: Wednesday, April 24 2013 6:51 a.m. MDT

In this Thursday, July 19, 2012 file photo, a UPS truck stops in front of a Sprint store at the Derby Street Shoppes in Hingham, Mass. Sprint Nextel Corp. reports quarterly financial results before the market opens on Wednesday, April 24, 2013

Stephan Savoia, Associated Press

Enlarge photo»

NEW YORK — The flow of new customers to Sprint stopped in the latest quarter, even as the company weighs the offers of two corporate suitors.

Sprint Nextel Corp. on Wednesday said it added a net of just 12,000 customers to its Sprint brand in the quarter, and it would have lost 252,000 if it wasn't for Nextel customers moving over now that their network is being shut down.

The number of new Sprint customers was the lowest for any quarter since 2009, and suggests that CEO Dan Hesse's carefully engineered turnaround of the company is on shaky ground. There are just 1 million Nextel customers left, raising the question of what Sprint's subscriber trends will look like when they're gone.

In the short term, having fewer new customers helps a phone company's bottom line, since it doesn't have to pay out as much in phone subsidies. Phone companies pay hundreds of dollars in subsidies to put new phones in customer hands for $199 or less.

Sprint, which has posted a net loss in every quarter for the last six years, narrowed its first-quarter net loss to $643 million, or 21 cents per share. A year ago, it lost $863 million, or 29 cents per share.

Revenue edged up 0.7 percent to $8.79 billion.

Both figures beat analyst estimates. According to FactSet's survey, Wall Street expected Sprint to report a loss of 32 cents per share on revenue of $8.73 billion.

Sprint has agreed to sell 70 percent of itself to Japan's Softbank Corp. for $20.1 billion, but last week got a competing $25.5 billion offer from Dish Network Corp. for the whole company.

Sprint shares slipped 2 cents to $7.08 in premarket trading, suggesting that investors don't believe the latest quarterly results will change the strategies of its suitors.

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