- Sprint First-Quarter Loss Widens as Customers Defect (Update1)
By Crayton Harrison
May 12 (Bloomberg) -- Sprint Nextel Corp., the third-biggest U.S. wireless carrier, said it may sell some assets after its first-quarter loss widened and more than 1 million customers dropped their contracts.
The net loss expanded to $505 million, or 18 cents a share, from $211 million, or 7 cents, a year ago, Overland Park, Kansas- based Sprint said today in a statement. Sales fell 7.5 percent to $9.33 billion, compared with the $9.39 billion average estimate of analysts.
Sprint said it may get rid of assets to meet obligations to lenders. Chief Executive Officer Dan Hesse is firing 4,000 workers, closing outlets and discounting wireless phone plans after the stock lost more than half its value in the past year. Nextel, which the company bought in 2005 for $36 billion, may be worth as little as $5 billion, according to some analysts.
"Sprint has had a really bad reputation for customer service,'' said Steve Clement, an analyst at Pacific Crest Securities in Portland, Oregon, who expects the shares to perform in line with the rest of the sector. "They've struggled to figure out a way to market themselves, and I think they're still struggling.''
Do tell. Given my recent experience with Sprint -- and some not-so-recent experiences, like dropped calls, no signal when the guy standing next to me is happily chatting away on his phone, a web site that keeps taking you back around to the front door where you can log in for the eleventieth time, and invoices that are byzantine even by cell-phone standards -- the amazing thing is that Sprint's stock still has half its value.
Suggestion: Quit the gimmicks, improve the service.