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Sprint Added Phone Customers Last Quarter, Topping AT&T, Verizon

Sprint ( S ) early Tuesday reported a higher-than-expected fiscal Q4 loss, but the wireless services provider also added postpaid phone subscribers for the third straight quarter. Sprint stock was up 2.5% in premarket trading Tuesday, following its earnings release. Sprint added 22,000 postpaid phone customers in the March quarter, while Verizon Communications ( VZ ) lost 8,000 and AT&T ( T ) lost 363,000. T-Mobile US ( TMUS ) was the biggest share gainer last quarter, adding 877,000 postpaid phone customers. “Postpaid” refers to customers who are billed monthly, a group that tends to spend more than prepaid customers who buy minutes as needed. In its fiscal year ended March 31, Sprint said it added 438,000 postpaid phone subscribers. Smaller Sprint and T-Mobile have been competing aggressively vs. wireless leaders Verizon and AT&T. “We generated positive postpaid phone net additions for the first time in three years, capped off by surpassing both Verizon and AT&T for the first time on record this quarter,” Sprint CEO Marcelo Claure said in the company’s earnings release. Sprint — majority owned by Japan’s Softbank ( SFTBY ) — said it lost 14 cents per share in fiscal Q4 vs. a 6-cent per-share loss in the year-earlier period. Revenue fell 2.5% to $8.07 billion. Analysts had modeled a 12 cent per-share loss on revenue of $8.02 billion. “Sprint reported solid fiscal Q4 results that were better than feared in a seasonally weak quarter,” said Wells Fargo analyst Jennifer Fritzsche in a research report. “The company added post-pay handsets in a quarter where AT&T and Verizon both reported net losses, and continues to make progress on its cost-reduction initiatives.”

Sprint Expected To Post Wider Loss; Could Add Postpaid Subscribers

Sprint ( S ) is expected to report a wider loss and lower revenue early Tuesday, though its postpaid wireless subscriber additions might increase. Sprint, which is majority owned by Japan-based SoftBank ( SFTBY ), will also likely provide fiscal 2016 guidance, analysts said. Sprint is expected to report a fiscal Q4 loss of 12 cents per share, widening from a 6-cent per-share loss in the year-earlier period. Revenue in the March quarter is expected to have fallen 3% to $8.05 billion, analysts polled by Thomson Reuters estimate. Sprint is the last of the four national wireless carriers to report March-quarter results.  T-Mobile US ( TMUS ) added 877,000 postpaid phone lines in Q1, while  Verizon Communications ( VZ ) reported a loss of 8,000.  AT&T ( T ) last week said that it lost 363,000 postpaid phone customers in Q1. Postpaid refers to customers who are billed monthly, a group that tends to spend more than prepaid customers who buy minutes as needed. AT&T has lost postpaid phone subscribers for six consecutive quarters. “We expect Sprint results will reflect a balanced focus to subscriber growth and profitability,” UBS analyst John Hodulik said in a research report. “We believe churn (customer disconnections) will tick up in Q1, and a lesser focus on volumes will drive slower, albeit positive, postpaid handset growth. This should drive some stability in service revenue declines. “We expect ongoing cost-cutting initiatives and savings from leasing uptake to provide upside to EBITDA (earnings before interest, taxes, depreciation and amortization). We expect management to provide fiscal 2016 guidance, including a path to total revenue stability and positive free-cash flow as the company exits the year.”

AT&T Push Into Mexico Vs. America Movil Looking Good So Far

AT&T ’s ( T )push into Mexico’s wireless phone market seems to be gaining traction vs. incumbent America Movil ( AMX ), analysts say. AT&T said it added 529,000 wireless subscribers in Mexico in Q1, with one-fourth the higher-spending postpaid customers who are billed monthly.  Late Tuesday, AT&T reported that its Q1 operating loss was $251 million, amid network investments and subscriber acquisition costs. “This is now the second consecutive quarter with 500,000 plus net adds, giving us confidence in the execution of the strategy abroad,” said Amy Yong, a Macquarie analyst, in a report. “Profitability is also expected to improve by the second half of 2016. We expect free cash flow contribution could come as early as 2017.” AT&T and America Movil both acquired more radio spectrum in a radio spectrum auction held by the Mexican government last quarter. In the U.S., AT&T said it lost postpaid phone lines for the sixth consecutive quarter amid stiff competition from  Verizon Communications ( VZ ), T-Mobile US ( TMUS ) and Sprint ( S ). AT&T acquired Mexico’s No. 3 wireless firm, Iusacell, as well as Nextel Mexico out of bankruptcy, for a combined $4.4 billion. It’s spending over $3 billion to upgrade networks to 4G technology. With the Q1 gain, AT&T has  9.2 million total wireless subscribers in Mexico. AT&T’s subscriber gains could accelerate after it finishes the 4G network upgrade, says Colby Synesael, an analyst at Cowen & Co. America Movil, which sells wireless services under the Telcel brand in Mexico, holds nearly 68% of the market, with Telefonica ( TEF ) at 19% and AT&T at 13%. Controlled by Carlos Slim, America Movil is one of Latin America’s two largest wireless services providers, along with Telefonica.