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Sprint to recombine PCS, FON
Telecom service company to end dual tracking stocks in effect since '98.
February 29, 2004: 3:59 PM EST

NEW YORK (CNN/Money) - Sprint Corp., the nation's No. 4 long-distance provider, said Sunday it will eliminate its wireless unit tracking stock, recombining it with the phone service shares into a stock that reflects all of the company's activities.

Under terms of the exchange, each Sprint PCS (PCS: Research, Estimates) share will be swapped for 0.5 Sprint FON (FON: Research, Estimates) share. Based on Friday's closing price of $17.73 for the FON stock, each PCS share would be valued at $8.865. That's less than the $9 close of the PCS shares Friday.

The Overland Park, Kan.-based company said the move is aimed at more efficiency in reaching customers, both business and consumer, and improving shareholder understanding of the company.

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The move toward a single stock comes as Sprint tries to more closely meld its local, long distance and wireless operations to eliminate overlapping sales and administrative functions, and to offer more complete service packages for its residential and corporate customers.

Sprint created the two stocks in 1998 to help investors more accurately follow the performance of its two units. But analysts have argued that the separation of the two businesses has made accounting more complicated and has added unnecessary costs and delays.

Sprint said there are about 1.04 billion shares of PCS common stock outstanding and roughly 906 million shares of FON common stock outstanding. Following the the recombination, Sprint said there will be about 1.42 billion shares of FON common stock outstanding.

Sprint said its board expects to declare the regular dividend of 12.5 cents per share on all outstanding shares of FON common stock, including those issued in the recombination, at its meeting in April 2004, payable to shareholders of record on a date in June 2004.

The conversion to the single FON stock will take place on April 23. The company said move doesn't require regulatory approval or a shareholder vote.

Taking the recombination into account, Sprint reiterated its 2004 forecast. It said in a statement that revenue will rise by 2 to 3 percent in 2004, with earnings per share before special items climbing to between 70 and 75 cents from 63 cents in 2003. Earnings are seen rising to $1.05 to $1.15 a share in 2005.  Top of page


-- Reuters contributed to this report




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