Sprint announces losses of $68 million

Amy Shafer

Thursday, July 18, 2002 | 9:59 a.m.

KANSAS CITY, Mo. -- Sprint Corp., the nation's third-largest long-distance carrier, announced today that it lost $68 million during the second quarter. Its wireless division lost $170 million.

The Overland Park, Kan.-based company's losses compare with earnings of $43 million during the same period last year.

William T. Esrey, Sprint's chairman and chief executive, said the company's local and long-distance division "experienced revenue challenges," while PCS had "lower customer additions."

Sprint's wireless business PCS Group lost 17 cents per share during the quarter that ended June 30, well below the 7 cents per share loss predicted by analysts surveyed by Thomson Financial/First Call. During the same period last year, PCS lost $247 million, or 26 cents per share.

Sprint's wireline business FON, meanwhile, earned $102 million, or 12 cents per share, compared with earnings of $290 million, or 33 cents per share, a year earlier.

Excluding one-time charges that included a $241 million write-down of an investment because of declining market value, Sprint FON earned 36 cents per share during the second quarter, beating analyst expectations of 33 cents per share.

Operating revenue for Sprint FON was down 8 percent to $3.97 billion from $4.31 billion in the second quarter of 2001.

Sprint said PCS had just 308,000 new customers in the quarter compared with 843,000 a year ago. The company blamed the low number of customer additions on competition, tightened credit polices and delayed purchases by some businesses in anticipation of the launch of high-speed data services later this summer.

Despite efforts to improve "churn" rates, or customer turnover, by changing its credit policies, Sprint PCS' churn rate was 2.9 percent, up from just over 2 percent a year earlier.

PCS had operating revenues of $3 billion during the quarter, compared with $2.29 billion a year ago.

Sprint, which employs 80,000 people, announced July 12 that it will cut 1,100 workers and eliminate another 100 unfilled jobs, bringing the total number of jobs cut since October to at least 13,000.

The cuts will come from the company's global markets division, which includes most of Sprint's long-distance business.