Westwood Don't sound the death knell yet on the telecommunications industry, Sprint Corp. chairman and chief executive officer William T. Esrey said Tuesday at the company's annual shareholders' meeting.
"Contrary to what you read in the media, it is not a moribund industry on its last legs and doomed for failure," Esrey said. "It is still a solid, vital industry and a key to our national competitiveness."
The industry is expected to grow at a 5 percent rate annually through 2005 "a rate faster than most other segments of the economy," Esrey said.
Sprint and other telecom firms' stocks in recent months have fallen. They have shed workers by the thousands, citing the need to increase efficiency and stay viable.
Some shareholders expressed concern about the stock prices of Sprint and its wireless division, PCS, and asked about the company's accounting practices.
Esrey assured shareholders that the company had "practiced conservative accounting" and did not engage in "the practices that have come under scrutiny, nor will we in the future."
Since October, the company has laid off about 11,000 employees. In a news conference after the shareholders' meeting, Esrey indicated any future cuts would be similar to more recent layoff announcements, which have involved about 100 or fewer jobs each time.
"I think this will be ongoing," Esrey said.
He attributed the industry's falling stocks in part to a "market psychology that's put telecommunications in the wastebasket." He said this psychology would change when companies produce results.
But when asked how he would encourage investors to choose Sprint stock or to keep it, he said, "I think these days, the last thing we should do is give people advice on what they should do with their own money."
Sprint's stock was up $2.79 to $16.26 and PCS shares were up $2.58 to $12.60 in trading Tuesday on the New York Stock Exchange. The company announced Monday that it had exceeded analysts' expectations for the first quarter. Sprint also said it was making progress in efforts to increase profitability and improve efficiency.