Sprint Profits Decline; PCS Group Misses Estimates By Wide Margin

Sprint

The combined revenue from its traditional voice and data FON group and its wireless PCS business was $6.83 billion vs. $6.45 billion for the year-ago period. The company reported a loss $68 million, compared with net income of $43 million last year.

The PCS unit had a loss of $170 million, or 17 cents per share, compared with second-quarter 2001 results of a loss of $247 million, or 26 cents per share. First Call estimates were for a loss of 7 cents.

The FON unit had net income of $102 million, or 12 cents per share, down from $290 million, or 33 cents per share, a year ago. Sprint blamed a decline in revenue of 8 percent to $4 billion year-over-year on softness in global markets and product distribution revenue.

"Although revenues continue to be a challenge, we are pleased with our progress on profitability," said Bob Dellinger, CFO during a call with analysts. "In the second quarter, phone operating income was $511 million, up 10 percent over last quarter."

Excluding one-time charge related to an investment, the FON unit's profits rose to 36 cents per share, compared with 33 cents per share a year ago, he said. First Call estimates forecasted earnings of 33 cents per share.

Sprint executives said the company will also be affected by the continual fallout over WorldCom. Executives said the company is owed $40 million by WorldCom, but that enterprises that weren't considering doing business with Sprint are now opening their doors.

Calls on the consumer side have also increased, they said.