Sprint (NYSE:S) investors haven't had much to be excited about recently, and the company's fiscal Q2 2014 earnings release isn't helping. The wireless carrier posted an operating loss of $192 million, equaling $0.19 per share. That's up from a loss of $398 million the same time a year ago. But this quarter's loss of $0.19 per share was much higher than the $0.06-per-share loss Wall Street analysts expected. Revenue for Q2 was $8.5 billion, up about 10% year over year.
In addition to the financial troubles Sprint's facing, the company saw huge losses in its postpaid subscribers numbers -- which declined by 272,000 in the quarter. That's bad enough on its own, but it's only part of the equation. While Sprint added 261,000 postpaid tablet subscribers, it lost a jaw-dropping 500,000 postpaid phone subscribers. Sprint ended the quarter with 55 million total connections.
Sprint's new CEO, Marcelo Claure, said the drop in network subscribers was due in part to the "adverse impacts to the customer experience resulting from its comprehensive network upgrade" over the past few quarters. Sprint's 4G LTE network now covers 260 million people, and the company is continuing to upgrade other parts of the network.
To quell fears, the company said in the earnings report that postpaid phone losses slowed by nearly 60% in September. Perhaps that was due in part to the company's launch of the new iPhone, which it said was the best iPhone launch the company's had to date.
As if the revenue and net postpaid subscriber losses weren't bad enough, Sprint announced that it's cutting an additional 2,000 jobs. The company said the cuts are part of a new plan to decrease spending costs by $1.5 billion. The job cuts will help reduce labor costs by $400 million on an annualized basis.
In the statement, Claure said: "While the company continues to face headwinds, we have begun the first phase of our plan and are encouraged with the early results. Every day we are focused on improving our standing with consumers, improving our network and controlling our costs."
In all, this was a really bad quarter for Sprint. Wall Street's Q2 expectations for Sprint were low, and the company failed to even meet those. While Sprint mentioned in the earnings release that its network is improving -- and even cited data from RootMetrics about the improvements -- it's clear that Sprint's failure to keep up with AT&T, Verizon, and T-Mobile US's network expansion, speed, and reliability continue to hurt the carrier.
On top of that, Sprint has the highest churn rate -- the rate at which customers leave the company -- in the industry. In Q2 2013, Sprint's churn rate was 1.99%, but that jumped to 2.18% in the most recent quarter.
Looking ahead, Sprint expects its huge phone subscriber losses to negatively affect next quarter's earnings. Even as the company cuts costs and improves its network, I think it's going to be a rough road ahead for Sprint. Its closest competitor, T-Mobile, has improved and expanded its 4G LTE network, has phenomenal subscriber growth, and continues to challenge the industry with new offerings. Perhaps the company should take a few pointers from the nation's "uncarrier" to help turn things around.