AT&T; Wireless, Nextel Post Losses

Nextel Communications Inc., the wireless-telephone company controlled by Craig McCaw, and AT&T; Wireless Services Inc., which McCaw sold to AT&T; Corp. in 1994, reported second-quarter losses Tuesday as they spent more to draw customers.

Analysts said they were pleased with the two companies’ performances in the key measures of revenue, cash flow, customer turnover, subscriber growth and cost to acquire each customer.

Nextel said its loss widened to $369 million, or 56 cents a share, from $241 million, or 38 cents, a year ago. Analysts expected a loss of 53 cents, according to First Call/Thomson Financial.

Sales grew 38% to $1.88 billion, as the company signed up 658,600 users, bringing its total to 8.95 million worldwide.

AT&T; Wireless, which was separated from its New York-based parent July 9, had a loss from operations of $35 million, or 3 cents a share, excluding an after-tax gain of $298 million, or 12 cents, from the sale of a stake in Japan Telecom Co. Analysts were expecting a loss of 1 cent.

The company added 668,000 new customers, bringing its total without affiliates and partners to 16.4 million.

“In telecom, the news has been terrible, and so I think wireless is one of the bright spots--where the companies are pretty well funded, the operations are doing well [and] the stocks are not overvalued,” Thomas Weisel Partners analyst Ned Zachar said. He rates Nextel shares a “ strong buy” and AT&T; Wireless a “market perform.”

Nextel said its expenses rose 33%. Still, its cost per new customer fell to $430 from $475.

At AT&T;, operating expenses rose 37%. Analysts said AT&T;’s results were hurt by its fixed-wireless business, which uses antennas on buildings to provide phone service.

Shares of Nextel, based in Reston, Va., fell $1.40 to close at $15.96 on Nasdaq. Shares of AT&T; Wireless, based in Redmond, Wash., fell 44 cents to $16.75 on the New York Stock Exchange.