Sprint Corp. Chairman William Esrey and President Ronald LeMay will step down from the No. 4 U.S. long-distance telephone company within days, sources familiar with the situation said Wednesday.
BellSouth Corp. Vice Chairman Gary Forsee is a leading candidate to succeed Esrey, who was diagnosed with cancer of the lymphatic system in November, but a contract has not yet been signed, one source said.
Sprint declined to comment. BellSouth did not return calls seeking comment.
Reports of the departures, coming just a week before the firm is due to report its fourth-quarter results, sent shares of Sprint's core operations down to a low of $11.15 in heavy trading on the New York Stock Exchange. The stock closed at $11.98, down $1.17, or 9%.
Although Esrey's departure would make sense given his health status, the surprising reports that both he and LeMay would leave spooked investors, analysts said.
After the market closed, Sprint said it would post fourth-quarter results for its long-distance and wireless units that met its earlier forecasts.
A departure of the two executives would follow a management shake-up at Sprint's wireless unit in September.
"Esrey's about the longest reigning telecoms CEO out there. It will eliminate a piece of continuity in that business. It's not a distraction that they need," said Morningstar telecommunications analyst Michael Hodel.