RESTON, Va. – Nextel Communications Inc. (NXTL), the wireless telephone service provider, reported a 69 percent increase in profits in the third quarter, thanks to continued customer growth as well as a one-time tax benefit, and boosted guidance for the year.
The company also revised upward its guidance for the rest of the year, estimating per-share earnings of $2.60 for 2004, compared to an earlier estimate of $2.00 per share.
Nextel said Friday it earned $586 million, or 52 cents a share, for the July-September period were up from $346 million, or 32 cents a share, a year ago. Revenue rose to $3.4 billion from $2.89 billion a year ago.
The most recent earnings include a one-time tax benefit of $175 million and a one-time loss of $21 million related to retirement of debt. Excluding those items, the company's per-share earnings of 39 cents per share came in a penny ahead of the estimate of analysts surveyed by Thomson First Call.
"Nextel continues to take more than its proportionate share of high quality subscribers, revenue and most importantly cash flow," said Nextel chief executive Tim Donahue.
The company added 550,000 subscribers to its Nextel service, giving it 14.5 million subscribers. Average revenue per handset dipped slightly in the quarter from $71 a month in the year-ago quarter to $69, but is still well ahead of the national average.
The Reston-based company also experienced strong growth in its prepaid Boost Mobile Service (search), thanks in part to an aggressive marketing campaign. Boost Mobile added 195,000 subscribers in the quarter, with total subscribers now at 800,000.
For the first nine months of the year, Nextel has earned $2.48 billion, or $2.16 a share, on revenue of $9.79 billion. That is up from $835 million, or 79 cents per share, on revenue of $7.81 billion in the first nine months of 2003.
It estimated it will add 2 million Nextel subscribers and 650,000 Boost Mobile subscribers for they year, up from 1.9 million and 500,000, respectively.
Nextel shares were up 24 cents to $25.51 per share on the Nasdaq Stock Market (search).