Sprint Nextel Earnings Decline 55%

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7:00 am on February 23, 2006 | Category: Business, Telecom Services, Wireless, Corporate

America’s third largest cell phone carrier, Sprint Nextel Corp., posted a 55% decline in fourth quarter earnings yesterday, due to merger expenses and disappointing wireless growth.

Sprint Nextel’s total profit came in at $197, which is quite a drop from $437 million in the final quarter of 2004.

Some investors are now questioning the company’s decision to spin off its local phone division, in order to focus on its faster growing wireless business. With a high mobile phone penetration rate in the US market, it appears that wireless industry growth could finally be slowing down.

Although prepaid wireless growth is still coming along nicely, the 746,000 new postpaid subscribers added by Sprint last quarter fell well short of the 900,000 predicted by analysts.

Shares in Sprint Nextel were down $1.13, or 4.5%, to close at $23.80 on the New York Stock Exchange yesterday.