Sprint to Cut 5, 000 Jobs; Stock Plunges http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2007/01/08/financial/f152503S05.DTL By THE ASSOCIATED PRESS Published: January 8, 2007 Filed at 11:01 p.m. ET RESTON, Va. (AP) -- Sprint Nextel Corp. reported Monday that its cell phone business suffered a net loss of 300,000 monthly subscribers in the fourth quarter and that the struggling wireless company will cut 5,000 jobs. The company's stock plunged more than 8 percent after the financial update, which included a 2007 outlook shy of many Wall Street forecasts. Sprint said it expects its 2006 results to be in line with its previous guidance, with full-year revenue of $41 billion to $41.5 billion and adjusted operating income before depreciation and amortization of $12.6 billion to $12.9 billion. On average, analysts surveyed by Thomson Financial are forecasting 2006 earnings of $1.26 per share on sales of $41.53 billion. For 2007, the company now expects operating revenue of $41 billion to $42 billion in 2007. Analysts are looking for earnings of $1.32 per share on sales of $42.04 billion. During the fourth quarter, Sprint added 742,000 net subscribers, ending the year with a customer base of 53.1 million. Those numbers include wholesale subscribers to other brands of cell phone service carried over the Sprint network such as Virgin Mobile. The fourth quarter net additions included 876,000 from both wholesalers and affiliate companies that sell Sprint Nextel services, as well as 171,000 new customers for Boost, a wholly owned subsidiary geared toward younger consumers. Offsetting the gains, however, was a net decline of 306,000 direct subscribers driven by a continuing exodus of Nextel subscribers amid frustration over worsening service quality. The Sprint brand subscriber base grew during the quarter, but not enough to offset the Nextel drop. The first quarter will see a continuation of the net decline in Sprint and Nextel customers, but the trend will turn positive for the second quarter and the full year, management said in a conference call, asserting that investments in adding caller capacity to the Nextel network began paying off in late 2006. ''We started to see positive indications in the fourth quarter,'' said Chairman and Chief Executive Gary Forsee said in an interview, noting that blocked calls on the Nextel network were at the lowest level ever. The planned job cuts, most of them expected in the first quarter, will reduce the size of Sprint's work force to just below 60,000 positions. The cuts are expected to be applied across the company's operations. Sprint Nextel also said it expects to incur about $700 million in merger integration and severance costs in 2007, the bulk of them coming in the first half of the year. ''Our plans for 2007 have a growth story, but that growth story won't happen until the second half of the year,'' Forsee said. The update came after the close of Monday's regular stock session. Sprint's shares slid $1.64 to $18 in extended trading after rising 43 cents, or 2.2 percent, to close at $19.64 on the New York Stock Exchange.
I guess the nextel fad is FINALLY OVER.... I got rid of my nextel in May of 2003, was about the time every 12 year old kid had one. At that time I had switched to a PDA/Smartphone where everyone would point and say what the hell is that. They mocked me for carrying this big hand held computer around, fast foward 3 years and its the biggest thing to enter the cellphone craze.
The click and beep thing was actually great, at first. . . then it went "beep beep" and that usually meant "problem problem". Then everyone who beeped you wanted immediate attention. After a while I wanted to throw it in the garbage, I just wanted real telephone calls again. As for the Blackberry, I dont have one and would find it a distraction to my lifestyle.
Funny that some of you mention construction types using the two way radios, because that industry is hurting right now. I wouldn't be surprised if a lot of the lost subscribers were the Nextel type carpenter/concrete/roofer/plumber/electrician/brick layer/ etc types.
You know, it's funny that they are cutting 5,000 jobs as the initial response when this was caused by the upper execs, who still get their million dollar bonuses and probably a severance package when they get ousted. Don't know about Nextel, but Sprint's problem was strategic. Lack of focus on simple customer service, lack of resources toward properly trained staff and an idiotic set-up of the store/service center. I left them (after being a customer of over 3 years) when I was trying to buy a new phone, they expected me to wait hours upon hours to get a new phone from that nightmare of a service center. I was astonished, it's not like I wanted repair service, I wanted to buy a new better more expensive phone a.k.a. give them money. So I turned around, went to Verizon and had a new phone and service within 20 min.
same thing happened to me, so I just to took a short drive to the nextel store. I shoulda just switched to another company alltogether.
Hmm let's say an exec makes cool 8$ mil a year (apparently the S&P CEO average pay this year) - how many workers can a company keep by cutting that person loose, assuming a regular worker takes home about $50 grand a year? 8,000,000/50,000 = 160 more people can feed their children and pay down their mortgages! I say get rid of them overpriced execs and keep the worker bees. But who makes those "executive" decisions? Not the hard working worker bees, of course. We live in a world of serfdom. . .
blue collar is the target market for nextel. good point earlier on the decline of construction jobs effecting this market. sprint regrets the nextel purchase, certainly. on the other side, just recd the free sprint air card for the laptop--- EVDO network, blazing speed, never an issue so far. great product. surf
REal;ly I just gave them a shot after havign trouble getting DSL. Certainly not fast enouhg to trade on. Might be fine for email/surfing