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Earnings Roundup

Sprint Nextel may sell assets

May 13, 2008

Sprint Nextel Corp. said Monday that it was considering selling assets after its net loss swelled to $505 million.

The first-quarter loss expanded to 18 cents a share, from $211 million, or 7 cents, a year ago, Overland Park, Kan.-based Sprint said. The company said it was considering shedding some assets, as well as renegotiating credit terms, to meet obligations to lenders.

Sprint lost 1.1 million contract customers last quarter, fewer than forecast, and said the declines would improve "marginally" this quarter. Customers have canceled over complaints about service after the $36-billion acquisition of Nextel Communications Inc.

"The first quarter was ugly, but that was also expected," said analyst William Power of Robert W. Baird & Co. in Dallas. "Hopefully, the first quarter is the low-watermark point in terms of subscriber growth."

Shares of Sprint fell 14 cents Monday to $9.24.

Sales dropped 7.5% to $9.3 billion, compared with the $9.4-billion average estimate of analysts in a Bloomberg survey. Analysts predicted a first-quarter net loss of 15 cents a share, or a profit of 2 cents excluding costs from items such as job cuts, according to the average estimates in the survey.

Chief Executive Dan Hesse, 54, is firing 4,000 workers, closing outlets and discounting wireless phone plans after the stock lost more than half its value in the past year.

Sprint may seek to dispose of Nextel or find a buyer for the entire company, the Wall Street Journal reported last week.

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