Sprint Profit Rises, but Street Expected More
Sprint Corp., the No. 3 U.S. long-distance phone company, said Tuesday that fourth-quarter profit per share rose 10%, below estimates, as it spent more on a new network and losses from international operations widened.
Profit before a gain rose to $404.6 million, or 79 cents a share, from $356.7 million, or 72 cents, in the year-earlier period. Sprint had been expected to earn 85 cents, the average estimate of analysts surveyed by First Call Corp.
Sprint is upgrading its U.S. network to combine voice, data and video services on one phone line and is investing in its Global One international phone alliance as it seeks to head off competition from rivals MCI WorldCom Inc. and a planned AT&T; Corp. venture. The investments have yet to pay off, and losses from those operations widened, offsetting strong growth in its main local and long-distance businesses.
“They didn’t make their numbers because of larger losses than expected for Global One,” said Bruce Roberts, an analyst at Dresdner Kleinwort Benson. “They spent more money marketing to large businesses, fixing up their network and putting in a sales organization” at Global One.
Sprint shares fell $2.25 to close at $81.94 on the New York Stock Exchange.
Revenue rose 7.6% to $4.14 billion from $3.85 billion, in line with third-quarter revenue gains.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
* Polo Ralph Lauren Corp. is closing nine stores and cutting about 250 jobs in an effort to slash expenses and boost its sluggish profits. The New York fashion house announced the reorganization while reporting a 13.5% drop in profit for its fiscal third quarter.
The job cuts represent about 4% of Polo’s 5,800-person work force.
It’s been a tough year for Polo, one of the best-known brands in fashion. Its merchandise is found in upscale country clubs and corporate boardrooms as well as the streets of urban centers around the world.
While expenses have risen, Polo has been hit by a sharp sales decline at the nation’s outlet centers, where it operates 89 stores. In addition, business at department stores, where Polo sells much of its merchandise, has been less than stellar.
Polo said it earned $25.4 million, or 25 cents per share, in the three months ended Dec. 26, down from $29.3 million, or 29 cents, in the same period a year earlier. Revenue rose 9.6%, to $447.5 million from $408.3 million.
* Chubb Corp., one of the country’s largest writers of commercial insurance, said fourth-quarter profit fell, in line with Wall Street’s lowered expectations, as prices in the standard commercial market continued to deteriorate.
Warren, N.J.-based Chubb said operating income fell to $147.8 million, or 90 cents a share, down from $174.5 million, or $1.01 a share, a year ago.
* MBIA Inc., the largest U.S. municipal bond insurer, said fourth-quarter earnings grew 18%, buoyed by acquisitions and higher revenue from its insurance of state and local government debt.
Profit excluding charges and investment gains rose to $116.2 million, or $1.16 a share, from $98.2 million, or 98 cents. The results match analysts’ average forecast for the Armonk, N.Y.-based company.
Total revenue from insurance increased 17% to $214.2 million, including investment income, realized investment gains and advisory fees.
* Triton Energy Ltd., which explores for oil and natural gas in South America and Southeast Asia, said its fourth-quarter loss ballooned, though less than expected, as crude oil prices fell to inflation-adjusted historic lows.
Triton’s loss before charges widened to $6.7 million, or 18 cents a share, from $500,000, or 1 cent, in the year-earlier quarter. Triton was expected to lose 33 cents a share. Revenue rose 8.7%, to $50.2 million from $46.2 million.
MORE EARNINGS: C2
