Sprint's wireline pain continues in Q3 as revenue drops 15%

Sprint (NYSE: S) may have seen some positive gains on its wireless side, but the company's ongoing migration to an IP-based network continues to cause pain on the wireline side with revenues declining 15 percent year-over-year to $1.1 billion.

The service provider attributes the year-over-year loss to annual intercompany rate reduction based on voice and IP market prices and the eventual migration of wholesale cable VoIP customers off Sprint's IP platform.

Likewise, on a sequential basis, Sprint's Q3 2011 wireline revenues were down almost 3 percent, which is also attributable to the cable migration issue.

One bright spot was that wireline operating expenses were almost $1 billion, down 11 percent year-over-year due to the lower cost of service from continued declines in voice and cable IP volumes, improvement in SG&A expenses and lower depreciation expenses. On a sequential basis, Q3 2011 net operating expenses remained relatively flat.

The service provider's wireline adjusted OIBDA was $184 million in Q3 2011 versus $271 million in Q3 2010 and $210 million in Q2 2011. Meanwhile, quarterly wireline adjusted OIBDA declined year-over-year and sequentially as due to lower revenue sales.
From an overall company perspective Sprint generated net operating revenues of $8.3 billion and adjusted OIBDA of $1.4 billion and has forecast full year capital expenditures in 2011, excluding capitalized interest, to be approximately $3 billion.

For more:
- see the release

Earnings summary: Wireline in the third quarter 2011

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