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Sprint posts huge loss, scraps dividends 29.02.2008 |
Sprint Nextel Corp posted a quarterly loss of $29.45 billion on Thursday due to a huge goodwill write-off and forecast deepening subscriber losses, pushing its stock down as much as 13 percent to a five-year low.
The No. 3 U.S. mobile service said it would stop paying dividends for the foreseeable future, and Chief Executive Dan Hesse said it would take many quarters to turn the company around and rebuild its brand.
"To be frank, the issues we face are more difficult than what I expected to find," Hesse, who replaced Gary Forsee as CEO in December, told analysts on a conference call. "It takes hard work and time to regain a reputation."
Sprint has been losing ground to rivals amid network and customer service problems. Analysts had expected the fourth quarter to be bad, but they were hoping for a clear plan from the company to turn around its business.
Instead, Sprint surprised Wall Street with a forecast for subscriber losses that was "considerably worse than even the most bearish estimates out there," said Stanford Group analyst Michael Nelson.
Sprint forecast that in the current quarter it would lose 1.2 million customers who pay monthly bills, compared with 683,000 such losses in the fourth quarter. Nelson had expected a first-quarter loss of 400,000.
Sprint said it does not expect subscriber losses to be any better in the second quarter.
Smaller rival T-Mobile USA, owned by Deutsche Telekom, on Thursday reported a gain of 951,000 net new customers in the fourth quarter.
Reuters
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 Sprint posts huge loss, scraps dividends
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