Advertisement

Archive for Wednesday, December 5, 2001

Sprint issues profit warning

KC firm gets eBay deal

December 5, 2001

Advertisement

— Sprint Corp. on Tuesday said projected revenues at its wireless division would be higher than the prior year, while earnings in its local and long-distance FON Group would fall below earlier forecasts.

Also Tuesday, Sprint announced that its fledgling data business, E:Solutions, had won a major contract with eBay to handle part of the online auction company's Internet traffic.

The Sprint PCS group expects revenues of nearly $2.8 billion in the fourth quarter, which ends Dec. 31, and about $13 billion in 2002.

Those figures, fueled by an increase in subscribers, would represent 40 percent and 30 percent increases, respectively, from the same periods a year earlier, the company said.

Sprint's FON Group lowered its projection of fourth-quarter earnings per share to a range of 25 cents to 27 cents from the 37 to 39 cents earlier predicted. The company cited losses in its global operations and from its now-canceled voice and high-speed Internet unit, ION.

Sales at FON are expected to reach $16.8 billion to $17.2 billion in 2002, about even or slightly down from 2001 final projections, the company said.

Sprint PCS shares lost 29 cents to $25.15 Tuesday on the New York Stock Exchange. Shares of Sprint's FON Group were off 58 cents to $21.12.

PCS, the nation's fourth largest wireless provider, reported third-quarter revenue of $2.65 billion, up 55 percent from the same period a year ago. The division lost $288 million, or 29 cents per share, in the period ending Sept. 30.

Sprint nearly has finished cutting about 6,000 jobs, or 7 percent of its work force, plus 1,500 contractor positions, a move announced Oct. 17 when the company reported lower third quarter earnings.

William Esrey, Sprint chairman and chief executive officer, told reporters Tuesday that no more layoffs were expected.

Esrey called E:Solutions' new deal with eBay a "big win" for the Internet-hosting business that top executives have said is key to Sprint's future.

The auction site will move some of its web-hosting computer servers to an undisclosed Sprint Internet Center.

Commenting has been disabled for this item.