Dec 13, 2002 2 min read

OVERLAND PARK, Kan. (AP) – Sprint Corp. boosted its fourth quarter earnings forecast for its long-distance division on Thursday, saying cost-cutting measures were having an effect. The news came a day after Sprint announced it would cut 2,100 jobs over the next year as it restructures operations and continues to reduce costs.

Sprint said it now expects fourth-quarter earnings per share for the long-distance division of 37 cents to 39 cents, compared with its previous forecast of 34 cents to 36 cents. For all of 2002, the company expects earnings per share in that area of $1.35 to $1.37. Sprint said an industry settlement on pay-phone access charges will boost earnings about 2 cents per share.

Analysts surveyed by Thompson First Call had a consensus for earnings of 36 cents per share in the fourth quarter and $1.33 for the full year.

In 2003, Sprint expects earnings to reach $1.40 to $1.45 per share.

“After an extended period of price declines and overcapacity, we are starting to see the supply and demand equation rationalize,” Sprint chairman and chief executive officer William T. Esrey said. “Sprint is well positioned to benefit as customers move away from distressed carriers.”

Shares in Sprint FON, which includes its long-distance division, rose 81 cents to $14.41 in trading Thursday on the New York Stock Exchange.

Sprint, the nation’s third-largest long-distance provider and fourth-largest wireless provider, presented its updated financial guidance to its annual investment community meeting Thursday in New York.

The company also said it expected its wireless division to report a net gain of customers in the fourth quarter, with the final numbers largely dependent on new acquisitions during the final weeks of December. Sprint PCS’ “churn” rate, or customer turnover, is expected to improve to around 3.5 percent for the fourth quarter, up from 3.8 percent during the third quarter.

In its wireless division, Sprint expects earnings before interest, taxes, depreciation and amortization for 2002 of $2.8 billion, up from previous guidance of $2.7 billion.

“Sprint PCS is well-positioned to deliver quality growth and profitability,” Esrey said. “The foundation is in place. We have ample spectrum and the largest digital PCS wireless network in the United States. We have increasingly differentiated services and technology, customers with strong usage patterns and a declining cost structure. And we are only at the beginning stages in demonstrating the full capabilities of this business.”

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