Sprint Nextel wrote off $29.7 billion in the fourthquarter as the struggling
wireless carrier acknowledged how much its business has eroded over the past
couple of years.
The Overland Park company on Thursday reported that sales for the fourth quarter
were $9.8 billion, down 6 percent from a year ago.
Sales for 2007 totaled $34.7 billion, down 1 percent from 2006.
The company said it is discontinuing declaring a dividend for the foreseeable
Earlier this year Sprint warned investors that it was preparing to take a
massive accounting charge, saying it would involve a substantial portion and
possibly all of the $31 billion in goodwill it carried on its books.
When final calculations were completed, Sprint executives determined that the
company needed to take a noncash accounting charge of $29.7 billion to reflect
the declining value of its 2005 purchase of Nextel Communications and smaller
affiliate wireless companies.
Sprint detailed again how far it slipped behind wireless industry rivals during
the final three months of 2007. Sprint lost 683,000 subscribers on monthly
calling contracts and another 202,000 prepaid subscribers.
Even after including gains in such categories as wholesale subscribers, Sprint
still finished overall with more than 100,000 fewer subscribers than it had when
starting the quarter.
In contrast, AT&T added nearly 2.7 million subscribers, Verizon Wireless added 2
million and TMobile USA nearly added 1 million subscribers during the fourth
Dan Hesse, Sprints new chief executive officer, indicated that 2008 would bring
more challenges in signing subscribers, making sales and tallying profits.
He ordered about 4,000 job cuts, the elimination of at least 1,600 contractor
positions and the closure of about 125, or 8 percent, of companyowned stores.
The moves are expected to bring $700 million to $800 million in annual savings.
Hesse also brought Sprints corporate headquarters back to Overland Park,
reversing a decision that had come with Sprints takeover of Nextel.
Consolidating the senior management team in Kansas, while maintaining a presence
in the Washington, D.C., area will allow Sprint to save on real estate costs and
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