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Sprint revenues race to $3.6 billion

The long distance and Internet access provider posts strong first-quarter revenues, but net income takes a hit from investments.

Sprint (FON) today announced that its revenues grew to $3.6 billion during the first three months of the year, but net income took a hit from investments the company made in its Internet and wireless businesses.

Revenues were up 7.3 percent from the $3.37 billion in revenues post during the first quarter of last year. The increases were fueled by Sprint's core local and long distance phone business, which expanded to $3.49 billion in net operating revenues for the quarter that ended March 31, up from $3.24 billion for the same quarter of the previous year.

Net income, however, dropped to $290 million, or 67 cents per share, from $309 million, or 77 cents a share, for the first quarter of 1996. Earnings were bogged down by after-tax losses of 21 cents a share from the company's Global One, Sprint PCS, and other ventures. Sprint said the loss compared to a more modest 7 cents a share after-tax loss on the operations for the year ago quarter.

Without the losses from the Global One, PCS, and emerging Internet, the company said it would have posted income of 88 cents a share.

Yet, the earnings were more than five percent higher Wall Street analysts' expectations. First Call's consensus estimate for the quarter was 63 cents per share.

Sprint said the Global One international voice and data services operation accounted for the biggest portion of the loss, along with expansion to its Sprint PCS wireless infrastructure.

Sprint PCS services are being built in 65 cities across the country this year, adding to a list of 30 cities where the services are already up and running. The companies has licenses to operate the services in local markets nationwide that are home to some 70 million people, the company said.

Also in the first quarter, Sprint launched its Internet Private Passport, a Net access services to business customers and users of online games.

Global One, Sprint's alliance with the European carriers France Telecom and Deutsche Telekom, landed a contract to provide high-speed data and Internet connections for government-run telecommunications carriers in six Chinese provinces during the quarter, the company added.

The company said cash flow increased by 5.1 percent to just over a billion dollars in the quarter, marking the first time it had topped the billion-dollar mark for a quarter.