Sprint posts third-quarter loss

Sprint posted a consolidated net loss of $498 million for its wireless and telecommunications divisions in the third quarter ending Sept. 30, compared to net income of $519 million in the same quarter a year ago.

Sprint posted a consolidated net loss of $498 million for its wireless and telecommunications divisions in the third quarter ending Sept. 30, compared to net income of $519 million in the same quarter a year ago.

The company attributed the loss to a $1.2 billion write-down in the fair value of Sprint’s Multichannel Multipoint Distribution Service (MMDS) assets in Sprint’s telecommunications division, the FON Group. The company suspended deployment of its MMDS wireless cable broadband service in late 2001.

Third quarter consolidated net operating revenue was $6.7 billion, compared to $6.8 billion one year ago. Sprint’s combined net income for the year stands at $1.2 billion, up from $591 million a year ago.

Sprint’s wireless division, the PCS Group, posted a net loss of $65 million for the quarter, on net operating revenue of $3.3 billion, compared to a net loss of $7 million last year during the third quarter. The PCS Group’s loss per share amounted to $0.07, which matched consensus analyst expectations, according to Thomson First Call.

Sprint’s FON Group posted a net loss of $433 million, on net operating revenue of $3.5 billion, compared to net income of $526 million a year ago. That translated into a $0.48 loss per share, but taking away the special-item adjustments, including the MMDS write-down, the FON Group posted a $0.38 profit per share, beating Thomson First Call analyst expectations of $0.34 per share.

Spring chairman and CEO Gary Forsee said in a statement that he was pleased with Sprint’s performance for the quarter, noting stable revenues and strong cash flow for the FON Group. Total cash flow for the quarter was $436 million, Sprint said, and $1.75 billion for the year.

“We are staying focused on executing our agenda of optimizing our wireline and wireless assets as a way of creating value to our two shareholder groups,” Forsee said in a statement.

Sprint officials called the quarter a positive one, despite a number of pressures on the telecom sector, including an oversupply of vendors and a weak general economy. “In this environment, Sprint’s FON Group did an excellent job of managing through these challenges, delivering solid financial performance,” said Robert Dellinger, executive vice president and chief financial officer, during a press conference on FON Group earnings. “I am confident that we can build on this performance.”

Sprint is ahead of a goal established in late 2002 to reduce net debt by $7 billion by the end of 2004, Dellinger said, and the company should reach this year’s goal of reducing networking and IT integration spending by $90 million. “I believe we’ve executed well in a challenging business environment, we’ve made notable progress on the cost side of the business and are committed to doing more,” he added.