Sprint (NYSE: FON) reported fourth quarter earnings of 47 cents a share on sales of $4.41 billion Tuesday. Sprint PCS (NYSE: PCS), which trades as a tracking stock, reported a fourth quarter operating loss of 75 cents a share, on sales of $996 million.
Sprint topped expectations (see full earnings release). First Call expected Sprint to report earnings of 38 cents a share and the PCS unit to report a loss of $1.44 a share. However, Sprint said the PCS results assumed a 2-for-1 stock split, scheduled for Feb. 4, had already taken place. It's not immediately clear if the First Call PCS estimates assumed the stock split or not.
Sprint said earnings (table) from core operations were 61 cents a share, but losses from its ION network and other ventures cut 12 cents from that tally. Factoring out earnings from discontinued operations of 2 cents a share, Sprint reported net earnings of 47 cents a share.
Sprint, which said in October it would merge with MCI WorldCom, said the merger was being reviewed by regulators with an expected close in the second half of 2000.
Long distance sales surge
For Sprint's core business, which includes long distance and data sales, reported fourth quarter revenue growth of 8 percent from a year ago. Net income was $416 million, up 3 percent from a year ago.
Among Sprint's core operations, the company said long distance revenue jumped 7 percent in the fourth quarter to $2.71 billion from $2.52 billion a year ago. Long distance calling volume rose 20 percent for the quarter and 22 percent for the year.
Sprint's local telecommunications business saw sales jump 7 percent to $1.48 billion in the fourth quarter. Local operating income surged and access lines increased 4.9 percent from a year ago.
The company also said data revenue jumped 40 percent from a year ago.
Sprint's new initiatives such as its ION broadband platform, however, had losses. ION posted a loss of 9 cents a share in the fourth quarter with other ventures losing 3 cents a share. Sprint began selling ION service to consumers and small businesses in Kansas City, Denver and Seattle in the quarter.
Sprint PCS adds 1M subscribers
Sprint said its PCS unit added 1 million wireless customers in the fourth quarter, up 24 percent from a year ago. For the year, Sprint PCS added 3.14 million subscribers to end the year with 121 percent more customers than a year ago.
Sprint PCS said it had 5.7 million subscribers at the end of the year with affiliates adding another 200,000 customers.
Sprint PCS reported revenue of $996 million in the fourth quarter, more than double sales from a year ago. Losses from continuing operations were 75 cents a share.
The company spent $1 billion in the fourth quarter upgrading its network. For the year, capital expenses were $2.65 billion for Sprint PCS.
For the year, Sprint reported a earnings of $2.31 per share on sales of $17.02 billion. Those results compare to earnings of $2.03 per share on sales of $15.76 billion in 1998. Net income rose to $1.57 billion in 1999 from $1.54 billion.
The Sprint PCS unit reported 1999 sales of $3.18 billion, compared to $1.23 billion in 1998. For the year, recurring cash flow losses were $1.71 billion compared to $1.60 billion a year ago. That loss amounts to $2.71 per share for 1999, said Sprint PCS.