Sprint Falls Down Again

Sprint (S Quote) cut its spending plan by 17% as third quarter sales come up short and customers continue to flee.

The Reston, Va., telco posted an adjusted profit of 23 cents a share, down from 32 cents a year ago but a penny better than analysts expected, according to Yahoo! Finance.

Sales for the quarter ended in September were $10 billion, about 5% below year-ago levels and under analysts' target for $10.2 billion.

Sprint says it lost 60,000 net wireless customers in the third quarter, restarting an alarming trend that has plagued the company ever since its merger with Nextel nearly two years ago. After trimming its monthly user defection rate to 2% in the second quarter, Sprint's so-called churn jumped up again to 2.3% in the third quarter.

The wireless customer loss comes during a quarter in which rivals Verizon (VZ Quote) and AT&T (T Quote) together added nearly 3 million postpaid wireless users.

"Our third quarter results reflect mixed performance as we address competitive market conditions and manage through credit market impacts on a portion of our customer base," acting CEO and CFO Paul Saleh said in a press release.

Looking ahead, Sprint now says full-year sales will come in "slightly below" its $41 billion target. The company lowered guidance last month when it announced the departure of CEO Gary Forsee.

Sprint has been sharing its pain with its networking gear suppliers Alcatel Lucent (ALU Quote) and Tellabs (TLAB Quote). Looking ahead, Sprint says it will slash its spending plan by 17%, to $6 billion for the year -- down from the previous budget of $7.2 billion.

Sprint shares fell 71 cents to $16.35 early Thursday.