Sprint Reports Profit Slip on Lower Rates

Sprint Corp. said Tuesday its third-quarter profit fell a slight 0.7% as declining long-distance prices sent sales growth to its lowest level in at least two years.

Profit from operations fell to $416 million, or 47 cents a share, from $419 million, or 48 cents a share, a year ago, the nation’s No. 3 long-distance company said.

Sprint was expected to earn 46 cents a share, an average from analysts surveyed by First Call/Thomson Financial. The company had been expected to earn 49 cents when it said on Sept. 20 that profit missed estimates because of higher costs.

Sales rose 2.4% to $4.4 billion, falling short of the 4% growth Sprint forecast last month. The shortfall was in long-distance sales, the company said.

Sprint shares have fallen by two-thirds this year as sales growth slowed. Long-distance prices have plunged to as low as 2 cents a minute from 15 cents a minute four years ago.

At Sprint PCS, the wireless unit that trades as a tracking stock, losses narrowed to $390 million, or 41 cents a share, from $615 million, or 65 cents, as revenue jumped 98% to $1.67 billion. The company added 839,000 customers in the quarter, a 16% increase from a year earlier.

Sprint PCS was expected to lose 42 cents, with estimates ranging from a loss of 46 cents to a loss of 39 cents.

Separately, Sprint said it will let employees exchange options granted this year for new ones to be distributed in May. This year’s options have lost value and aren’t enough “to motivate and retain employees,” the company said.

Sprint’s revenue growth is the slowest since it created shares to track Sprint PCS in November 1998.

Long-distance revenue rose 3% to $2.75 billion, missing expectations of a 5% rise. Sales of local calls rose 3% to $1.42 billion.

Shares of Westwood, Kan.-based Sprint fell 63 cents to close at $23.19, while shares of Sprint PCS, in Kansas City, Mo., fell 94 cents to $30.81, both on the New York Stock Exchange.