Tough Times Continue for Sprint Nextel

Telecom News Editorials Reports Glossary

6:00 am on August 9, 2007 | Category: Business, Wireless, Corporate

America’s third largest wireless carrier, Sprint Nextel Corp., posted a 95% drop in second-quarter profits yesterday, due to high ongoing merger and severence expenses, and cautioned investors that subscriber growth could slow.

Sprint’s quarterly income fell to just $19 million, or less than $0.01 per share, from $370 million, or $0.10 per share, in the second quarter of 2007. Excluding one-time expenses, profits were $0.25 per share, beating average analyst predictions of $0.22.

Shares in the carrier were down $0.45, or 2.2%, however, on predictions that subscriber growth would slow in the months to come. Chief Financial Officer, Paul Saleh, disappointed analysts by saying that the wireless market would be “challenging” in the third quarter, preventing growth in subscriber additions.

“This second quarter was supposed to be the turning point,” commented Credit Suisse analyst, Christopher Larsen. “It didn’t instill a lot of confidence in people.”