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Sprint stumbles on results
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February 2, 1999: 11:32 a.m. ET
Phone service unit's 4Q earnings fall short of Wall Street's expectations
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NEW YORK (CNNfn) - Stock of Sprint Corp.'s long-distance and local phone service division tumbled Tuesday after the unit's reported earnings failed to connect with Wall Street's fourth-quarter expectations.
The Kansas City, Mo.-based Sprint (FON) said the phone service unit's fourth-quarter pro forma earnings from continuing operations were 79 cents per diluted share, missing First Call's estimates of 85 cents per share.
Sprint stock was down 4 Tuesday morning to 80-3/16.
The earnings include losses of 23 cents per share related to the development of Sprint Integrated On-Demand Network and other ventures, including its international communications company Global One.
The results compare to 72 cents per share in the year-ago quarter on a pro forma basis, which included an 18 cents per share loss related to Global One and other ventures.
Including non-recurring items, Sprint's service operations earned $404.6 million, or 93 cents a diluted share, up from $356.7 million, or 82 cents.
Revenue increased 7.6 percent to $4.14 billion. Operating income for the quarter was up $672 million in the quarter, a 7.8 percent gain for $623 million a year earlier.
The company said its fourth-quarter long distance operating income increased 31.8 percent to $382 million from $290 million a year ago.
The results reflect the division of Sprint's phone service group and its wireless mobile phone operations, which went into effect in November. Per share results are given on a pro forma basis as though the division were in effect for the entire quarter and year.
For the year, earnings per diluted share were $3.41, which include losses of 20 cents per share related to the development of Sprint ION and 45 cents related to Global One and other ventures. The results compare to 1997 earnings of $3.07 per share, which included losses of one cent per share related to Sprint ION and 47 cents per share for other ventures.
Revenue for the year was up 7.7 percent to $16.02 billion. Operating income was $2.76 billion, a 10.8 percent increase. Long distance operating income for 1998 grew 30.8 percent to $1.37 billion.
Sprint PCS Group (PCS), the company's wireless personal communication services unit, reported net losses in the fourth quarter of $646.5 million, almost four times the year ago figure of $161.8 million.
The unit saw a recurring net loss per diluted share of $1.51 for the fourth quarter and $4.50 for the year.
Operating losses were $849 million for the quarter and $2.39 billion for the year, excluding a nonrecurring charge of $179 million for acquired in-process research and development related to Sprint's acquisition of the remaining interests in Sprint PCS.
Revenue for the quarter was $437.4 million.
Sprint PCS stock was down 2-5/16 at 29-1/4.
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Sprint
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