Sprint's telecommunications and wireless phone groups beat analyst estimates, with net income for both groups up significantly from a year ago, in a second quarter earnings announcement Monday.Sprint's FON Group, its telecommunications arm, reported income from continuing operations of $90 million during the quarter, compared to $64 million a year ago. Earnings per share before adjustments was $0.35, two cents more than analyst predictions of $0.33, according to Thomson First Call.Sprint's PCS Group, its wireless phone service, reported a second quarter net loss of $92 million, down from a loss of $170 million a year ago. Analysts were expecting a loss off $0.11 a share, but the PCS Group reported a loss of $0.09 a share.Consolidated net operating revenue for the company was $6.5 billion, compared to $6.7 billion a year ago. However, net income was $7 million, compared to a net loss of $68 million a year ago. Operating income adjusted for special items was $754 million, up 13% from a year ago.Gary Forsee, chairman, president and CEO of Sprint, attributed the positive quarter to strong customer demand. The PCS Group added more than 600,000 new customers, he said, and the number of DSL subscribers grew 20%, to 223,000 customers. Sprint PCS now has more than 18.8 million customers, according to the company.Sprint remains in a good position to draw more customers and revenue, despite challenges in the telecommunications industry, said Len Lauer, president of Sprint PCS. "This is not new to anyone, but the wireless industry remains highly competitive," he said. "We don't see this changing in the short term."Despite these challenges, we know we will be able to compete because of our strategic assets, the correct technology choice, ample spectrum and one back-office system that allows us to deliver industry-leading applications to the customers quickly," Lauer added.Howard Janzen, president of the Sprint Global Markets Group, said significant challenges remain for Sprint's non-wireless activities, including a slow economy and aggressive competitors. "However, we have seen some indications that would at least suggest we may be bouncing along the bottom, instead of continuing a move downward," Janzen said. "We're seeing signs of broader customer interest in information technology spending, that's expected to drive spending in communications products."Janzen attributed much of the positive numbers in the quarter to cost-cutting and subscriber growth. Capital spending was 60% below the second quarter of 2002, he said. "We all understand, however, that we can't exclusively cut costs to achieve true prosperity, and that we must rekindle growth," Janzen added.The company ended June with more than $2.7 billion in cash, Forsee said. Since the beginning of the year, Sprint's debt has declined by $3.5 billion, putting the company ahead of schedule on its two-year plan to reduce net debt by $7 billion.