UPDATE 3-Sprint Q1 revs top estimate as network upgrade progresses
(Updates share price, adds quote from CEO, churn and EBITDA numbers)
By Marina Lopes
WASHINGTON, July 30 (Reuters) - Sprint Corp reported higher-than-expected first-quarter revenue on Wednesday, as the company expanded its high-speed coverage and came closer to completing a network overhaul that has caused more frequent dropped calls and subscriber losses.
Faced with growing competition from its rivals like T-Mobile, Sprint has slashed prices and offered customer guarantees in an attempt to offset those subscriber losses.
"Its not as horrible as people feared. The company has done better than the really pessimistic expectations, but it is still not doing well," said Roger Entner, lead analyst at Recon Analytics.
"It has to get better soon because they should be at the tail end of their network overhaul. At the same time, T-Mobile is showing dramatic growth," he said.
The company is currently testing new price plans, Sprint's Chief Executive Dan Hesse said in a call with investors.
"When you look at doing a reprice, you want to make sure your network is strong enough that you can attract new customers to offset the price down of existing customers," Hesse told Reuters in an interview.
Sprint will also launch highly customizable plans on its Virgin Mobile brand sold exclusively at Walmart. The plans start as low as $6.98 per month. Customers can then add special offers that give unlimited access to applications like Facebook and Pandora.
Sprint switched from reporting on a calendar year to a fiscal year this quarter.
The company reported a growing customer defection rate, known in the industry as churn, of 2.05 percent, higher than the 1.83 percent Sprint reported a year ago, but down from last quarter's 2.11 percent.
The company reiterated its forecast of earnings before interest, taxes, depreciation, and amortization (EBITDA) between $6.7 billion and $6.9 billion for the calendar year 2014.
Excluding unusual items, Sprint earned 1 cent per share in the quarter ended June 30, compared with Wall Street expectations of a loss of 1 cent, according to Thomson Reuters I/B/E/S.
The company, 80 percent owned by Japan's Softbank Corp , posted a profit of $23 million, the highest in over seven years.
Revenue fell to $8.8 billion from $8.9 billion a year earlier, but beat the average analyst estimate of $8.7 billion according to Thomson Reuters I/B/E/S.
The company lost 181,000 contract subscribers, fewer than the average estimate of 293,000.