UPDATE 1-NII Holdings warns on profit as subscriber losses mount
http://currenteconomictrendsandnews.com/wp-content/uploads/2013/10/5115a__p-89EKCgBk8MZdE.gif
- Share this
- Reprints
* Third-quarter earnings $ 1.74/share vs est. $ 1.17
* Revenue $ 1.10 bln vs est. $ 1.23 bln
* Shares drop 21 pct to a more than 10-year low (Adds details from conference call, updates share movement)
Oct 31 (Reuters) – NII Holdings Inc, which provides telecom services under the Nextel brand in Latin America, said it would miss its full-year profit forecast, mainly due to subscriber losses in Mexico and higher investments in its 4G network.
The company’s shares fell as much as 21 percent to a more than 10-year low at open on Thursday.
NII said its new network in Mexico was unable to handle the migration of customers from Sprint Corp’s iDEN network, causing outages and service problems. This led to higher customer defections and lower average subscriber revenue, NII Chief Executive Steve Shindler said on a conference call.
“We expect more subscriber losses in the fourth quarter,” he said.
NII, which operates the Nextel brand under a license from Sprint, was forced to shift customers to its own network after Sprint shut the iDEN network in June.
The iDEN network is used mostly by business customers.
NII said it expected full-year adjusted operating income before depreciation and amortization to come in at least $ 200 million below its prior forecast of $ 600 million to $ 650 million.
The company, which targets business customers in Mexico, Brazil, Argentina and Chile, also said it was modifying its compensation plans to slash costs and was cutting sales jobs.
NII reported net subscriber losses of 178,400 during the third quarter ended Sept. 30. The losses were much bigger than the 32,000 estimated by Wells Fargo analyst Jennifer Fritzsche. Macquarie Capital’s Kevin Smithen was looking for additions of 3,000.
NII’s quarterly results were also hit by higher investments in its next-generation networks, lower average revenue per subscriber and customer migration costs in Mexico.
The company’s net loss widened to $ 299.9 million, or $ 1.74 per share, from $ 82.4 million, or 48 cents per share, a year earlier.
Operating revenue dropped 22 percent to $ 1.10 billion.
Analysts on average had expected a loss of $ 1.17 per share on revenue of $ 1.23 billion, according to Thomson Reuters I/B/E/S.
The company’s shares were down 17 percent at $ 3.96 on the Nasdaq after touching a low of $ 3.80 earlier. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila and Kirti Pandey)
Read more about UPDATE 1-NII Holdings warns on profit as subscriber losses mount and other interesting subjects concerning Real Estate at TheDailyNewsReport.com
No comments:
Post a Comment