As expected, Sprint PCS on Monday lowered its subscriber targets for 2002. The nations fourth-largest digital wireless network operator also just missed analysts estimates for losses in its fiscal fourth quarter 2001.
Sprints wireless division reported a pro forma loss of 32 cents per share, with a net loss of $328 million, on revenue of $2.76 billion. Revenue was up 42 percent compared to the $1.93 billion in the fourth quarter of fiscal 2000. Total 2001 revenues rose 53 percent year over year, to $9.73 billion, up from $6.34 billion in 2000.
These PCS Group financials were derived by removing a one-time restructuring expense of $10 million, primarily affecting Sprint companion FON group. These expenses are considered normal business expenses under generally accepted accounting principles.
Analysts surveyed by Thomson Financial/First Call were expecting a loss of 31 cents per share on revenue of $2.8 billion this quarter.
Sprint PCS added 1.5 million new customers in the fourth quarter. Of these, 381,000 were the result of acquisitions. All told Sprint PCS added 5 million customers for the year.
During the fourth quarter Sprint formed a few new alliances aimed at the enterprise. One related offering was Sprints PCS Business Connection Personal Edition, which allows access to corporate e-mail, calendar and contacts on the Sprint network.
"The average number of subscribers per business account in the quarter grew 21 percent, from the fourth quarter of 2000, and the overall business customer base grew 43 percent year over year," said Levine. "At the end of the year, 20 percent of our direct subscriber base was enrolled under a business services agreement."
Before the earnings announcement, however, Sprints stock dropped 11.8 percent on concerns about the companys 2002 guidance.
Sprint said on Monday after market close that based on fourth quarter performance, and general industry trends, it was revising downward its estimates for net new PCS subscribers, from 3.6 or 3.7 million to approximately 3 million.
Sprint PCS is expected to roll out its third generation of wireless services, called 1X, in the summer of 2002. Sprint described that roll out as "on track." Levine said 10 percent of handsets sold this quarter were 3G equipped. The new wireless network will offer data services at peak speeds of 144 Kbps per second. Within two year that speed will increase to 3 Mbps per second, Sprint PCS said, surpassing the speeds of a 56 Kbps dial-up modem.