Sprint Leads Telecom's 2Q Stock Winners

Shares of many telecommunications shops performed well during the second quarter of 2008, quite a surprise considering the abysmal three-month performance by the Dow Jones Industrial Average and the S&P 500 during that span.

Despite slowing economic conditions that dragged the Dow lower by 7% and the S&P 500 down by nearly 3%, telecom-related stocks ended the April-June quarter higher. Struggling wireless provider Sprint Nextel (S Quote) proved the best performer, surging more than 40% as CEO Dan Hesse has worked to turn the company around and to slow customer attrition. Also during the quarter, Sprint announced a joint venture with Clearwire (CLWR Quote) for WiMax technology.

Nortel Networks (NT Quote) was another winner, rising more than 20%. The network equipment maker reconfirmed its full-year outlook during its investor meeting in June, saying it expects revenue to grow in the low single-digits compared to 2007.

Qualcomm (QCOM Quote) also notched a strong quarterly performance, rising 9% after the handset maker recently raised guidance for its fiscal third quarter and full-year 2008, citing strong fundamental drivers of its business. Additionally, the telecom reshuffling in China is expected to benefit Qualcomm, as the company's CDMA and WCDMA devices will function on new 3G networks being built out in the country.

Among other winners, Deutsche Telekom (DT Quote) rose 6%, embattled network equipment maker Alcatel Lucent (ALU Quote) gained 5%, and Vodafone (VOD Quote) added 4%.

Not all telecom-related stocks were winners in the second quarter, however. Handset device makers Motorola (MOT Quote) and Nokia (NOK Quote) fell 20% each as both companies saw sales shrink in North America. Equipment supplier Ciena (CIEN Quote) also fell hard in the quarter, with shares losing 25%.

Surprisingly, AT&T (T Quote) and Verizon (VZ Quote) lost ground over the last three months, down 12% and 2%, respectively. Among other weak performers, 3Com (COMS Quote) lost 4% and both Cisco (CSCO Quote) and Corning (GLW Quote) shed 3%.