Sprint CEO Gary Forsee steps down

Announcement comes after days of rumors that the troubled wireless carrier was looking to replace its top man; CFO Paul Saleh temporarily in charge.

NEW YORK (CNNMoney.com) -- Sprint Nextel said Monday that Gary Forsee, the company's chairman and chief executive officer, is leaving immediately.

The news follows days of rumors surrounding Forsee's future at the nation's number three wireless carrier, which has seen its shares lose over a quarter of their value in the last two years.

Sprint Nextel chairman and chief executive Gary Forsee stepped down Monday amid poor financial performance at the nation's number three wireless carrier.

Sprint also said it expects operating revenue for 2007 to come slightly below its prior targeted range of $41 billion to $42 billion.

Paul Saleh, the chief financial officer, will serve as acting chief executive until a permanent replacement for Forsee is found, the company said in a statement. Director James Hance Jr. will serve as non-executive chairman of the board.

Sprint (Charts, Fortune 500) stock, halted for 45 minutes following the announcement, resumed trading after hours little changed from its close of $18.50 on the New York Stock Exchange.

In its statement, the company said it "is the right time to put in place new leadership to move the company forward in improving its performance and realizing corporate objectives."

"The board's search for selecting its next chief executive will focus on candidates outside the company," Irvine Hockaday, a Sprint director, said in the statement.

One analyst said no matter who the next chief is, Sprint will have a hard time growing its subscriber business amid stiff competition in the wireless industry. "There's no silver bullet the new management team can bring in," said Steve Clement, an analyst at Pacific Crest Securities in Portland, Oregon. "Things are still in limbo."

The announcement follows reports last week that Forsee was about to step down and that the company was already looking for a replacement.

Forsee took over the nation's third-largest wireless provider in 2003. Since Sprint bought Nextel Communications Inc. in August 2005, the company has struggled with several problems and its stock price has dropped 27 percent.

The company announced that it expects to report a net loss of approximately 337,000 subscribers in the third quarter.

Sprint, which is set to report its third quarter earnings on Nov. 1, is expected to see earnings decline by roughly 25 percent in each of the remaining two quarters in 2007, according to Thomson Financial.

-from staff and wire reports Top of page