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Sprint 4Q tumbles
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February 4, 2002: 5:53 p.m. ET
No. 3 long-distance carrier sees lower sales, yet manages to edge estimates.
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NEW YORK (CNN/Money) - Sprint Corp. said Monday that fourth-quarter profit at its long-distance unit tumbled from a year earlier, edging Wall Street expectations excluding items, as the nation's No. 3 long-distance phone company struggled with investment losses and an industry-wide decline in demand amid the recession.
Excluding losses on its integrated on-demand unit (ION) and other one-time items, Sprint (FON: Research, Estimates) posted earnings of 31 cents a share, down from 53 cents a share a year earlier. Analysts on average anticipated a profit of 30 cents a share, according to earnings tracker First Call.
Including those items, the long-distance unit, called the Sprint FON Group, posted a net loss for the quarter ended Dec. 31 of $904 million, or $1.02 a share, down from a profit of $99 million, or 11 cents a share a year earlier.
Fourth quarter revenue fell $4.01 billion from $4.39 billion.
The Kansas City, Mo.-based company also said 2002 profit excluding losses for ION would be about $1.40 a share for the FON Group, which is at the low end of Sprint's estimates, but ahead of Wall Street expectations of $1.35 a share, according to First Call.
"While 2001 has clearly been a challenging year, I believe the FON Group is positioned well in the local service market and in the high-growth Internet and data segments," Sprint Chairman William Esrey said in a statement.
On Dec. 4, Sprint warned that fourth quarter results would fall short of expectations because of the slowdown in the global economy, which cut into its local telecommunications and global markets divisions.
The economic slowdown has hurt other carriers, including AT&T (T: Research, Estimates) , which on Jan. 30 posted a sharply lower fourth-quarter profit, as the nation's biggest long-distance company took a $1 billion restructuring charge.
One-time items in the fourth quarter reduced earnings before interest, taxes, depreciation and amortization by $1.8 billion, and income from continuing operations by $1.1 billion. In addition to losses from ION, the company recorded costs associated with corporate restructuring and litigation in its Global Markets division.
Sprint PCS (PCS: Research, Estimates) , the company's wireless division, said its fourth quarter loss narrowed to 32 cents a share from 53 cents a share a year earlier. But that was slightly worse than analysts' forecasts for a loss of 31 cents a share, according to First Call.
PCS revenue increased to $2.8 billion from $1.9 billion.
The company said near-term growth for the PCS group will be slower than initially anticipated, lowering its forecasts for new customers to about 3 million from previously announced estimates of 3.6 million-to-3.7 million.
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Full-year capital expenditures are expected to be $3.4 billion, lower than previous guidance of $3.5 billion.
Sprint's FON group shares shed $1.21 to $16.01 Monday ahead of its earnings release. Shares of Sprint PCS fell $1.83 to $13.76. 
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