Kansas City, Mo. Shares of Sprint and Sprint PCS took a dive Tuesday, a day after the telecommunications giant announced dismal earnings and lowered expectations for the next year.
Sprint PCS, the company's wireless division, was hit especially hard in trading Tuesday on the New York Stock Exchange.
Shares fell $2.77, or more than 20 percent, to close at $10.99, after hitting a low of $10.40. Shares of Sprint FON which represents Sprint's larger local and long-distance calling services fell $2.18, almost 14 percent, to $13.83.
Shares of some other wireless and telecommunications companies, including Nextel and WorldCom, also fell. Shares of Nextel Communications Inc. tumbled almost 26 percent to $5.05, while WorldCom shares were down more than 14 percent to $6.97.
"I think it's a whole industrywide phenomenon," said Sprint spokesman Bill White, adding that the massive selling of Sprint and other telecommunications stocks was "probably an overreaction."
Rex Mitchell, an analyst for BB&T; Capital Markets, said Sprint FON's earnings forecast for 2002, announced after the market closed Monday, was the likely trigger for the stock sell-off. But Mitchell also said the entire industry "is suffering from overcapacity and falling prices."
"I think the long-distance industry is in real trouble," he said.
Sprint announced Monday that in the next year, it expects FON Group earnings, excluding losses for ION, to approach $1.40 per share. The company expects earnings before interest, taxes, depreciation and amortization to approach $4.6 billion.
Sprint FON lost $906 million, or $1.02 per share, during the quarter that ended Dec. 31. Those numbers included a $1.8 billion charge Sprint took to end its ION broadband initiative.
The company said PCS lost $328 million, or 33 cents per share, during the fourth quarter, compared with a $512 million loss, or 53 cents per share, in the same period a year ago.
Sprint PCS also lowered expectations for the coming year, saying industry growth was expected to slow.
Sprint PCS has a customer service call center in downtown Lawrence.