Sprint lowers guidance

Sprint lowered its financial guidance for the fourth quarter and full-year 2001 for both its wireless and wireline groups. On the wireless side, the company expects earnings before interest, taxes, depreciation and amortization (EBITDA) to be in the upper $300 million range for the quarter and in the low $1.5 billion range for the full year. Previously, it had expected full-year EBITDA to be close to $1.6 billion. The company said an increase in marketing cost and lower-than-expected wholesale margins contributed to the revised guidance.

Sprint PCS also announced that in the fourth quarter it added 1.1 million customers, bringing its year-end direct customers to 13.6 million. For the full year, PCS Group added more than 4 million direct customers. Customer additions in Sprint's affiliate channel added an additional 381,000 net customers. Affiliates ended the year with a total of 2.04 million customers. Growth was steady throughout the quarter, but overall customer sign-ups were affected by lower than normal holiday sales.

On the wireline side, the company will take a one-time charge of slightly less than $2 billion for the termination of ION and restructuring. Additionally, because services revenue growth is expected to be generally at the low-end of previous guidance and product distribution revenues will likely be below guidance, fourth quarter revenue is expected to be in the low $4.0 billion range compared with the previous target of $4.1 billion to $4.2 billion.

Full-year revenues are expected to slightly exceed $16.9 billion while EBITDA should be in the upper $4.6 billion. Sprint had previously estimated full-year EBITDA at $4.7 billion.--Vince Vittore