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Sprint warns on '01 results
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April 17, 2001: 12:15 p.m. ET
Long-distance carrier misses first-quarter estimates, cites sluggish revenue
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NEW YORK (CNNfn) - For the second time this year, No. 3 U.S. long-distance telephone company Sprint Corp. warned Tuesday that 2001 results at its long-distance unit will fall sharply below forecasts as it reported first-quarter net income fell 72 percent amid lower calling prices, stiff competition, and investments to build its data and wireless businesses.
Kansas City-based Sprint said it now expects second-quarter earnings per share in the low 30-cent range and full-year earnings 10-15 percent short of forecasts, the company said in a conference call with analysts Tuesday. Analysts on average were expecting the company to earn 38 cents in the second quarter and $1.54 a share for the full year, according to earnings tracker First Call.
Revenue is expected to grow at a "very low single-digit rate," the company said.
 The warning comes more than two months after Sprint initially warned that stiff competition in long-distance and its investment in a Brazilian telecommunications operation could help push 2001 estimates below expectations.
Sprint, along with most of its competitors, spent much of the booming 1990s laying fiber-optic cable and lines meant to carry high-speed DSL and broadband telephone, Internet and cable services in anticipation of a sharp growth in demand.
But demand has fallen short of expectations and carriers find themselves unable to recoup their investments, putting earnings under heavy pressure.
A significant drop in long-distance subscriptions led by a downturn in business accounts and a switch to mobile phone service added to their woes.
Though it has had to adjust expectations, the company continues to focus attention on wireless and broadband services.
"We have shifted our focus and our resources from a predominantly wireline voice business to higher-growth areas of data, wireless and broadband services, where we expect to see significant dividends in the years to come," CEO William Esrey said.
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For the first quarter, Sprint's (FON: down $1.01 to $22.40, Research, Estimates) net income dropped to $315 million, or 36 cents a share, from $1.12 billion, or $1.25 a share, a year earlier. Analysts had forecast 37 cents a share, according to earnings tracker First Call.
Sprint PCS (PCS: Research, Estimates), the company's wireless telephone arm, reported net operating revenue surged 68 percent to $2.05 billion, and average revenue per user increased 6 percent to $60 a month as it added 875,000 customers in the first quarter.
-- from staff and wire reports 
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