From Wall Street Journal Sprint Results.
Sprint Beats Street Estimates
As Sales Rose 7.2% in Period
Dow Jones Newswires
KANSAS CITY, Mo. -- Sprint Corp., the nation's No. 3 long-distance carrier, on Tuesday posted better-than-expected results for the first quarter. Its Sprint PCS wireless-communications unit reported a wider-than-expected loss.
The parent company's earnings, after extraordinary items, rose 16% from the year-ago pro forma level to $406.2 million, or 93 cents a diluted share -- three cents above the mean estimate of analysts polled by First Call. In the year ago period, Sprint had a profit of $351.5 million, or 80 cents a share.
Revenue rose 7.2% to $4.17 billion from $3.89 billion a year ago.
Sprint said long-distance revenue rose 9% from a year ago to $2.63 billion, and operating income climbed 21% to $388 million. Calling volumes rose 24%, while operating cash flows increased 16% to $615 million. Sprint's local telecommunications revenue rose 6% to $1.37 billion, while the unit's operating income was up 5% at $365 million, Sprint said.
Losses for Sprint's struggling Global One venture and other alliances were 10 cents a share in the latest quarter, compared with a 13-cents-a-share loss in the year-ago period. After-tax losses for its Sprint ION network totaled seven cents a share in the latest quarter.
The company said product distribution and directory publishing revenue increased 9% to $425 million, but the unit's operating income fell 6% to $56 million because of costs associated with the 1998 acquisition of a directory sales organization.
Meanwhile, Sprint PCS reported a loss before items of $605 million, or $1.41 a diluted share, which was 12 cents wider than expected. Revenue jumped to $604.2 million from $203.3 million a year ago. The PCS unit said it outran growth expectations in the quarter, adding 763,000 new subscribers. It had forecast 700,000 new subscribers.
Although Sprint PCS expects the pace of new customer additions to slacken in the second quarter, it has raised its full-year projection to about three million new customers from a previous estimate of 2.5 million. It also increased capital spending projections for 1999 by 20% to $3 billion.
For the first quarter, Sprint PCS reported a monthly customer turnover rate of about 3%, in line with expectations. Customers' average monthly bills were just over $52. Sprint PCS said it is working to keep customer bills high even though prices are falling by adding services such as roadside assistance for motorists and text messaging. Sprint PCS is targeting a customer defection rate for the year at the low end of the 3% range.
The company said it is having great success with cross-marketing efforts that aim to sell long-distance service to its wireless customers and wireless service to long-distance customers.
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