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Sprint falls to 4th place: Why Sprint execs are still smiling

Sprint posted quarterly earnings Tuesday, showing that it is exceeding analyst expectations and rebuilding its customer base. Is that enough?

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A woman talks on her phone as she walks past T-Mobile and Sprint wireless stores in New York, July 30, 2009.

Brendan McDermid/Reuters/File

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 Well, it’s official: Sprint’s third-place title has left the building.

The company added 675,000 new customers in the last quarter, compared to T-Mobile’s more than 2 million, reported Recode. T-Mobile's total subscriber count reached 58.9 million, beating Sprint’s 57.7 million.

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The shift in market share had been widely expected. After T-Mobile posted its quarterly earnings last week, analysts predicted that it would finally surpass Sprint to become the nation’s third-largest wireless carrier, reported USA Today.

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T-Mobile’s figures had exceeded Wall Street expectations, posting $8.2 billion in sales compared to the $7.96 billion average estimate, reported Bloomberg.

This new ranking "almost has a psychological significance that trumps the practical significance," John Jackson, a mobile analyst with research firm IDC, told USA Today.

But not all is lost for Sprint. As the Kansas-based carrier filed its own quarterly earnings Tuesday, the company also surpassed analysts’ estimates, Bloomberg reports.

Firstly, its return to customer growth marks a significant improvement after seven straight years of customer losses, noted Bloomberg.

CNET reports that instead of losing 150,000 customers last quarter, as one Macquarie Securities analyst had projected, Sprint lost 12,000.

It also showed signs of increasing customer loyalty, as its traditional postpaid subscriber base – a lucrative sector of users who pay the bill at the end of the month rather than in advance – experienced a lower turnover rate than before, the company reported.

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As a signal of rising confidence, Sprint raised its outlook for the fiscal year. It now expects its earnings before income and taxes to land between $7.2 billion and $7.6 billion, compared to an earlier forecast of $6.5 billion to $6.9 billion.

This was largely based on the company’s earnings last quarter, which at $2.08 billion surpassed predictions of $1.8 billion, according to Bloomberg. Sales, however, fell 3 percent to $8.03 billion, as opposed to forecasts of $8.33 billion.

Tablet sales and call quality improvements are contributing to Sprint’s new stream of subscribers, which a spokesman told CNET has continued into July.

But Bloomberg reports the latest numbers also suggest progress for CEO Marcelo Claure, who joined Sprint last August and has gotten more attention for squabbling on Twitter with T-Mobile head John Legere than leadership.

On Monday, Mr. Claure announced a reshuffle in senior management, taking on new hires Tarek Robbiati and Günther Ottendorfer as chief financial officer and chief operating officer, as well as promoting John Saw, chief network officer, to head up its tech division.

"It's exciting to see the company competing again as a result of our turnaround plan," said Claure in a conference call with analysts on Tuesday.