CEO of Sprint Nextel resigns
new york -- Sprint Nextel Corp. Chairman and Chief Executive Gary Forsee resigned Monday as the board expressed disappointment with the financial results of the nation’s third-largest wireless carrier. Sprint also lowered its financial forecast for the current quarter.
“It is the right time to put in place new leadership to move the company forward in improving its performance and realizing corporate objectives,” board member Irvine Hockaday said in a company statement.
The board said it was searching for a replacement for Forsee, who was also president. In the meantime, director James Hance Jr. will be acting nonexecutive chairman, and Chief Financial Officer Paul Saleh will serve as acting chief executive.
Also on Monday, Sprint Nextel said it expected to report a net loss of about 337,000 monthly subscribers in the third quarter. Its 2007 operating income, excluding some items, is expected to fall below the previously forecast range of $11 billion to $11.5 billion. Revenue is expected to fall below the earlier forecast of $41 billion to $42 billion.
Sprint Nextel shares closed Monday at $18.50, down 51 cents, or 2.7%. In extended trading, after the announcement of Forsee’s departure, the shares gained 45 cents.
Forsee took over the nation’s third-largest wireless provider in 2003 and was a driving force behind the acquisition of Nextel Communications Inc. in August 2005.
However, the company has struggled since the deal, and its stock price has dropped 27%. Amid technical problems and a sometimes unfocused marketing strategy, Sprint Nextel has steadily lost ground to competitors AT&T; Inc. and Verizon Wireless in attracting and retaining customers. Nextel’s phones, known for their “push-to-talk” feature, aren’t directly compatible with Sprint’s network.
Most recently, Forsee has hung the company’s future on the development of WiMax, a fourth-generation mobile data network that the company says will provide wireless download speeds comparable to DSL or cable modems. It aims to connect not only cellphones but also computers, video cameras and other gadgets. Wide-scale commercial application is still years away.
Sprint Nextel is formally based in Reston, Va., Nextel’s old base, but maintains operational headquarters in Overland Park, Kan., Sprint Corp.’s hometown.
Acting Chief Executive Saleh, 50, comes from the Nextel side, where he was chief financial officer. Before that, he was treasurer of Walt Disney Co. and Honeywell International Inc.
Acting Chairman Hance, 63, is a former vice chairman of Bank of America Corp. He has been on the Sprint Nextel board since February 2005.
Forsee joined Sprint after its top two executives were pushed out after a scandal over their use of tax shelters.
Before that, he was vice chairman of BellSouth Corp. In that role, he was responsible for all of BellSouth’s domestic operations and headed the Cingular Wireless joint venture.
Before joining BellSouth, Forsee spent 10 years with Sprint, where he was president of the business services group and served as interim chief executive of the company’s wireless venture. He also worked at AT&T; Corp. and Southwestern Bell for almost 18 years.
