Sprint (NYSE: S) may have made gains in its wireless business in Q1 2012, but the wireline the service provider continues to see declines due to price reductions in wireline voice and IP services.
During the quarter, wireline revenues declined 11 percent year-over-year to $1 billion.
It attributes the decline to two factors: intercompany rate reduction based on market prices for voice and IP services sold to the wireless segment,and the expected migration of a wholesale cable company customer off Sprint's IP platform. On a sequential basis, Q1 wireline revenues were also down 5 percent due to a reduction of intercompany rates from the decline of market-based wireline service prices.
Operating expenses declined about 8 percent year-over-year and 7 percent sequentially due to lower cost of service from continued declines in voice and cable IP volumes, SG&A expense improvement and lower depreciation expenses.
However, the service provider did make a number of wireline strides in Q1 focused on Unified Communications (UC) and cloud services.
Among those accomplishments was the debut of its Complete Collaboration UC service and its Wholesale Cloud Services offering targeting resellers serving the small- and medium-sized business (SMB) market.
From an overall financial perspective, Sprint reported that consolidated net operating rose 5 percent year-over-year to $8.7 billion for the quarter, but were nearly unchanged from Q1 2011. However, it did have a net loss of $863 million and a diluted net loss of $.29 per share for the first quarter of 2012, which was narrower than Wall Street estimates.
Looking forward, the service provider has forecast 2012 Adjusted OIBDA to come in at the high end of its previous forecast of between $3.7 billion and $3.9 billion.
In afternoon trading yesterday, Sprint's shares rose 1 cent following an earlier 7 percent gain.
- see the earnings release
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