Nextel Misses Expectations
The Associated Press
Jul. 24, 2001
Second-quarter losses at Nextel Communications Inc. expanded 53 percent, despite a 38 percent increase in revenues and the addition of nearly 660,000 subscribers to its customer base.
The Reston, Va.-based telecommunications company reported losses Tuesday of $369 million, or 56 cents a share, for the second quarter ending June 30, compared with a loss of $241 million, or 38 cents a share, in the year-ago period.
The second quarter numbers include a $22 million, or 3 cents per share, restructuring charge, and a loss of $55 million, or 6 cents per share, related to currency translation.
The loss was greater than the 53 cents per share predicted by Wall Street analysts surveyed by Thomson Financial/First Call. Nextel said, however, that some analysts incorporated the charges into their estimates, while other didn't.
Despite the losses, Nextel president and chief executive Tim Donahue said the quarter was a good one, citing the company's increase in its subscriber base, a 50 percent improvement in domestic cash flow and the company's efforts to cut costs as positive factors.
Many telecommunications executives believe cash flow is a better measure of their company's strength than earnings.
Nextel now has nearly 9 million subscribers, mostly in the United States.
Quarterly revenues increased 38 percent to $1.88 billion, from $1.37 billion in the year-ago period.
For the first six months of the year, the company lost $741 million, or $1.12 a share, on revenue of $3.62 billion. In the year ago period, the Nextel lost $624 million, or 97 cents a share, on revenue of $2.54 billion.
In trading on the Nasdaq Stock Market, Nextel shares fell $1.40 to $15.96.
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