Sprint’s Net Income Rises on Wireless Demand

Sprint Corp., the third-biggest U.S. long-distance telephone company, Monday reported net income of $7 million as demand for wireless services rose, countering a fall in revenue from its main telephone business.

The profit, which combines the results of the Overland Park, Kan.-based company’s wireless unit and its local and long-distance unit, compared with a net loss of $68 million in the same period a year ago, including a $241-million investment write-down.

Chief Executive Gary Forsee, hired in March, has trimmed debt and capital spending and is focused on improving the company’s wireless unit to offset 10 quarters of sliding long-distance revenue. Sprint PCS added a higher-than-expected 617,000 new customers in the quarter, while encouraging them to be more loyal and spend more on their monthly bills.

“Sprint, like all the carriers, is looking for wireless to offset the decline in its landline business,” said Edward Sullivan, director of research at Sage Advisory Services, a holder of Sprint bonds.

Results at the company’s two main units beat analysts’ forecasts.

The wireless unit, the nation’s fourth-biggest mobile-phone provider, had a narrower net loss of $92 million, or 9 cents a share, compared with $170 million, or 17 cents, a year earlier, when the company had a $241-million investment write-down. Sales rose 2.6% to $3.1 billion.

The company was expected to have a loss of 11 cents a share on sales of $3.05 billion, according to Thomson Financial.

Sprint PCS said service revenue growth wouldn’t be as robust as it thought. The company cut its forecast for a rise in 2003 service revenue to a “mid-single-digit” rate from a previous forecast of a “mid-to-high-single-digit” rate.

Shares that track the performance of the company’s PCS wireless operation fell 27 cents to $6.35 after hours. They had risen 30 cents to $6.62 on the New York Stock Exchange before earnings were released.

The local and long-distance operation had net income of $99 million, or 11 cents a share, down from $102 million, or 12 cents, a year earlier. Sales fell 8% to $3.53 billion.

Shares that track Sprint’s long-distance unit rose to $15.27 after hours. They closed unchanged at $15.19 on the NYSE.