QCOM--Sprint Announces Record First Quarter Results
PR NEWSWIRE - April 18, 2000 07:29
KANSAS CITY, Mo., Apr 18, 2000 /PRNewswire via COMTEX/ -- Sprint today announced record first quarter results. Sprint's consolidated net operating revenues for the quarter were $5.48 billion, an 18 percent increase from $4.65 billion in the first quarter of 1999.
The Sprint FON Group's core businesses reported a strong increase in earnings driven by double-digit growth in operating income in each core business unit. The PCS Group had another quarter of outstanding subscriber growth, with net customer additions of 831,000 -- the equivalent of adding a new customer every 10 seconds in the quarter. Sprint PCS ended the quarter with more than 6.5 million customers nationwide. The PCS Group also reached a major milestone in the quarter by exceeding the $1 billion quarterly revenue mark for the first time.
"On both sides of the business -- wireline and wireless -- Sprint continues to demonstrate its leadership in the marketplace with an enviable combination of assets including a superior brand, state-of-the-art technology, innovative marketing and bundles of high-demand products and services that leverage the company's local, long-distance, wireless, data and Internet capabilities," said William T. Esrey, Sprint chairman and chief executive officer.
SPRINT FON GROUP HIGHLIGHTS
* Revenues increased 7 percent in the first quarter of 2000 to
$4.40 billion from $4.11 billion in the first quarter of 1999.
* Excluding a one-time 2-cent gain, diluted earnings per share from core
operations increased 18 percent to 65 cents per share in the first
quarter compared to 55 cents per share a year ago.
* Operating income from core operations rose 14 percent to $907 million
in the first quarter from $795 million during the same period last
year.
* Operating cash flows from core operations were $1.42 billion in the
quarter, an increase of 10 percent from the first quarter a year ago.
* Net income was $1.12 billion in the quarter, compared with $406 million
for the same period a year ago. Net income for the quarter included a
$675 million, or 75 cents per share, after-tax gain on the sale of
Sprint's investment in Global One. Net income in the same period a year
ago included a $28 million, or 3 cents per share, after-tax loss from
Sprint's interest in Global One losses.
Long-distance
* Quarterly revenues increased 7 percent to $2.74 billion from
$2.56 billion in the first quarter of 1999.
* Operating income was $431 million in the quarter, an 11 percent
improvement from $388 million in the first quarter of 1999.
* Calling volumes rose 17 percent for the quarter compared to 1999.
* Operating cash flows increased 7 percent for the quarter to
$667 million from $626 million in the first quarter last year.
Local telecommunications
* Revenues in the quarter increased 4 percent to $1.43 billion compared
to $1.37 billion in the first quarter of 1999.
* Operating income rose 15 percent in the quarter to $416 million from
$363 million a year ago.
* Access lines increased 4.7 percent from the first quarter of last year.
* Operating cash flows increased 12 percent to $695 million from
$623 million in the previous first quarter.
Product Distribution and Directory Publishing
* Revenues increased 7 percent in the quarter to $454 million from
$426 million a year ago.
* Non-affiliate revenues increased 17 percent in the quarter compared to
the same period a year ago.
* Operating income increased 20 percent to $67 million in the first
quarter from $56 million a year ago.
Sprint ION(SM) and Other Ventures
* Sprint ION's after tax losses were 11 cents per share for the quarter
compared with 4 cents in the quarter a year ago.
* First quarter losses for other ventures were 6 cents per share compared
with 2 cents a year ago.
"The FON Group has started the year on a strong note," Esrey said. "Our core businesses' strong showing was attributable to continued execution on all fronts and strong demand for Sprint's bundled services."
In the long-distance business market during the quarter, Sprint had double-digit revenue growth. In the data market, ATM, IP and Frame Relay revenues grew collectively over 50 percent compared to first quarter 1999. Additionally, Sprint signed multi-year contracts for multiple products including Frame Relay, Internet Protocol, and Asynchronous Transfer Mode (ATM) services with Hughes/Raytheon, Paramount Pictures, Dell Computers, Oracle, and The Gap among others.
Residential long-distance revenues declined during the quarter due to reduced international revenues and the one-time loss of a LEC calling card contract; however, residential long-distance sales continue to be aided by Sprint's ability to effectively sell bundled product offerings. Sprint's share of the long-distance market in its incumbent local territories rose to 34 percent, attributable to increased bundled sales. Sales of wireline long-distance service through Sprint PCS stores were also very strong.
The local operation achieved a record operating margin of 29.1 percent during the quarter through profitable revenue growth and continued cost control measures that allowed only a 1 percent increase in operating expenses in the quarter. Overall revenue growth was driven by a 21 percent increase in vertical services revenue compared to the same period last year and a 28 percent increase in data revenues.
During the quarter, Sprint announced plans to expand its presence in Texas, unveiling a comprehensive suite of integrated communications products that will provide customers a wide variety of options for integrating their local, long-distance and high-speed Internet services. The Texas product package includes Sprint's premier communications service, Sprint ION, offered to consumers and small businesses in Dallas and Austin. Sprint ION builds on the essential integrated local and long-distance bundles to include high-speed Internet access, multiple voice/fax lines, advanced broadband features, and unprecedented customer control delivered from a single provider.
SPRINT PCS GROUP HIGHLIGHTS * Sprint PCS had net customer additions of 831,000 in the first quarter. In the quarter, Sprint PCS transferred approximately 45,000 customers to its affiliate, Independent Wireless One. Excluding this one-time transfer, Sprint PCS had net operational customer additions of 876,000. * Sprint PCS ended the quarter with a total of more than 6.5 million customers nationwide and nearly 6.9 million customers including Sprint PCS affiliates. * Average monthly revenue per user (ARPU) was slightly over $54 -- approximately 30 percent higher than the industry average. * Total service revenue reached $1 billion in the quarter -- a first for the company. Operating cash flow losses narrowed to $181 million for the quarter. * Losses from continuing operations for the quarter decreased to 54 cents per share from 71 cents per share a year ago. * Capital expenditures were $693 million for the quarter, reflecting the continued expansion of the company's nationwide wireless network. The Sprint PCS nationwide network, along with affiliates, now covers 195 million people or more than 70 percent of the U.S. population. Sprint PCS is the largest all-digital wireless network in the United States.
The PCS Group's first quarter net operational customer additions of 876,000 represents an 18 percent increase over the first quarter of 1999. Sprint PCS is expected to lead the wireless industry in subscriber growth for the sixth consecutive quarter.
"Quarter after quarter, Sprint PCS continues to outpace the wireless industry by a substantial margin. Additionally, Sprint PCS in the first quarter proved to be hitting on all cylinders -- achieving beyond-expectation customer and revenue growth as well as significant progress toward profitability," Esrey said. "And with industry innovations such as our pioneering Sprint PCS Free & Clear nationwide plans, the groundbreaking Wireless Web and our successful completion of the industry's first 3G voice call, Sprint PCS is poised to continue to define the direction of this dynamic industry well into the future."
In the quarter, Sprint PCS announced a major strategic alliance with Ford Motor Company to deliver clear, 100-percent digital, voice-activated wireless voice and data solutions to select 2001 Lincoln models. The new telematics services -- which will include voice-activated calling, emergency and roadside assistance, and information services such as news, sports, weather and stock quotes -- will feature an integrated dual-band Motorola StarTAC Sprint PCS Phone with optional Sprint PCS Wireless Web Service.
In addition, Sprint PCS, Samsung, and QUALCOMM announced that the three companies had successfully made the first voice call by a carrier using third-generation (3G) Code Division Multiple Access (CDMA) 1x technology in North America. The call was made during a demonstration at the Sprint PCS Technology Integration Lab in Lenexa, Kansas.
During the quarter, the Sprint PCS Wireless Web continued to expand its service offering with the addition of several new content partners.
* Sprint PCS and AOL announced an agreement that will deliver 'AOL Wireless' services to the Sprint PCS Wireless Web. By this summer, Sprint PCS customers nationwide will have clear access to AOL's world-class brands and content including AOL.com, MyAOL.com and AOL Classic directly on Sprint PCS Internet-ready phones. * Sprint PCS also announced that EarthLink's award-winning Internet access will soon be available on Sprint PCS Internet-ready phones through an arrangement designed to expand their existing alliance. As a result, EarthLink members nationwide will have access to their EarthLink email and select content from their PC-based EarthLink Personal Start Page portal on the Sprint PCS Wireless Web. * Sprint PCS also reached agreements with Go2 Systems to provide location-based information services; E-Compare to provide online comparison shopping services on the Sprint PCS Wireless Web; and Dictionary.com to provide access to dictionary and language translation services.
Also in the quarter, Sprint PCS announced a definitive agreement with Pegaso PCS of Mexico that will allow the introduction of new cross border services and a close alignment between two of the largest all-digital, all-CDMA, nationwide PCS networks in the world. The agreement includes Sprint PCS representation on Pegaso's governing board and an investment of $200 million by Sprint PCS in the Mexican carrier.
Sprint PCS also unveiled several new and innovative PCS phones. Sprint PCS will be the first to offer Samsung's new line of advanced wireless phones - the first in the United States to offer Spanish voice prompts. Sprint PCS also announced that it would be the first carrier to offer several new "smart" phones from LG InfoComm.
Sprint is a global communications company -- at the forefront of integrating long-distance, local and wireless communications services, and one of the largest carriers of Internet traffic. Sprint built and operates the United States' first nationwide all-digital, fiber-optic network and is a leader in advanced data communications services. Sprint has $20 billion in annual revenues and serves more than 20 million business and residential customers.
SOURCE Sprint |
