Wireless Operations Boost Sprint's Top Line

Sprint's ( FON) fourth-quarter consolidated revenue grew from a year ago, largely because of a top-line increase at Sprint PCS ( PCS), but the phone company trimmed its capital spending estimate for 2002 and indicated that wireless growth would likely slow in the near term.

Fourth-quarter revenue rose 7% from a year ago to $6.66 billion. Revenue for the PCS group, the company's separately traded mobile wireless operations, rose 42% to $2.76 billion, from $1.94 billion a year ago. For the rest of Sprint, quarterly revenue totaled $4.01 billion, down from $4.39 billion in the same period the prior year.

Excluding items, Sprint PCS lost 32 cents a share in the fourth quarter. According to First Call, analysts were expecting a loss of 31 cents. When calculated according to generally accepted accounting principles, the loss at PCS comes to 33 cents.

The main Sprint operations earned 31 cents in the quarter, excluding certain items and losses related to an abandoned networking effort called ION. Analysts were looking for a profit of 30 cents. Including items, Sprint lost $1.02 a share. Sprint expects the FON group to earn $1.40 in 2002, excluding losses for ION, which would be at the low end of the company's previous guidance. The current mean analyst estimate is $1.35.

The company also said fourth-quarter results for the PCS group and the industry suggest that near-term growth will be slower than what was expected just a few months ago. The PCS group is now expected to add about 3 million subscribers in 2002, compared with previous estimates of 3.6 million to 3.7 million. In the fourth quarter, Sprint PCS, with its affiliate partners, added 1.5 million new customers.

Sprint had already cut its capital spending plan for this year, but the company trimmed its estimate further, to $3.4 billion, compared with the previous forecast of $3.5 billion.

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