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 - Cramer on S - Stock Picks) 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 - Cramer on CLWR - Stock Picks) for WiMax technology.

Nortel Networks (NT Quote - Cramer on NT - Stock Picks) 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 - Cramer on QCOM - Stock Picks) 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 - Cramer on DT - Stock Picks) rose 6%, embattled network equipment maker Alcatel Lucent (ALU Quote - Cramer on ALU - Stock Picks) gained 5%, and Vodafone (VOD Quote - Cramer on VOD - Stock Picks) added 4%.

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

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