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Nextel tops earnings estimates

The wireless communications company posts a narrower-than-expected fourth-quarter loss but says first-quarter results may be affected by higher operating expenses.

    Nextel Communications posted a narrower-than-expected fourth-quarter loss but said first-quarter results may be affected by higher operating expenses in the first part of the year.

    Shares of the wireless communications company slipped $3.69, or more than 12 percent, to $25.88 in midday trading.

    The Reston, Va.-based company, which replaced its chairman late Thursday, reported a net loss $61 million, or 34 cents a share, excluding one-time gains. The results were 2 cents better than the 36 cents a share loss forecast by First Call. The loss narrowed 83 percent from the loss of $369 million, or 52 cents a share, a year ago.

    Including one-time gains from investments, the company had a loss of 8 cents a share for the quarter.

    Fourth-quarter operating revenue at Nextel rose to $1.65 billion, compared with $1.09 million in the year-ago period.

    Consolidated operating cash flow (earnings before interest, taxes, depreciation and amortization) rose to $387 million during the quarter, up 79 percent from the $216 million reported in the year-ago period. Domestic operating cash flow grew 67 percent to $418 million during the fourth quarter, from $251 million a year earlier. Operating cash flow loss from international operations was $33 million.

    The company said domestic operations added around 521,200 new subscribers during the quarter, with 2.16 million new subscribers added for the year.

    On a conference call, company executives said domestic revenue for 2001 is expected to grow 25 percent to 30 percent over 2000 levels to over $7 billion. Cash flow growth of 50 percent to 60 percent is also forecast, the company said.

    The company also said that operating expenses will be significantly greater earlier in the year, with accelerating cash-flow growth in the second half of 2001. As a result, domestic operating cash flow in the first quarter of 2001 may not exceed that of fourth-quarter 2000, the company said.

    For fiscal 2000, the company saw a loss of $1.02 billion, or $1.21 a share, excluding extraordinary items. The loss was narrower than the loss of $1.53 billion, or $2.29 a share, reported in 1999, as well as the $1.49 loss forecast by the Street.

    The company reported full-year consolidated revenue of $5.71 billion, up 51 percent from the $3.79 billion seen in 1999. Domestic operating revenue was $5.38 billion, while international operations brought in $330 million in operating revenue.

    Consolidated operating cash flow for the entire year increased to $1.26 billion from $535 million in 1999. Cash flow for domestic operations doubled--from $698 million in 1999 to $1.4 billion in 2000. Operating cash flow from international operations showed a loss of $133 million, slimmer than the $163 million loss reported for 1999.