Sprint reports strong quarter on wireless gains

Sprint's second-quarter net income more than doubled from a year earlier thanks to a strong performance from its wireless division, the company said Wednesday. The solid quarter prompted it to raise its financial guidance for the full year.

Net income for the three months to June 30 was $600 million, or earnings of $0.40 per share, up from $236 million and $0.16 per share in the second quarter of 2004, the company said. Analysts had been expecting $0.36 per share, according to a consensus estimate from Thomson Financial.

Revenue came in at $7.1 billion, up 3.6 percent from $6.9 billion a year earlier, Sprint said.

Sprint's wireless division generated $4 billion in revenue, an increase of 11.8 percent from last year. The growth was helped by nearly 600,000 new wireless subscribers and a 64 percent increase in wireless data revenue, the company said. Operating income from the division climbed 50 percent, to $625 million.

Its long-distance results were less impressive, although they were still better than expected. Revenue from this group slid 8.1 percent from last year, to $1.7 billion. Of that, voice revenue dropped 9.4 percent to $1.1 billion, with the steepest declines among consumers. Revenue from Internet services fell 16.8 percent and data services dropped 4.1 percent. IP (Internet Protocol) services sold to large businesses were a bright spot, Sprint said.

Revenue from local services declined 1.9 percent from a year earlier, to $1.48 billion. Sales of voice and other services fell, although revenue from local data services climbed 17.1 percent. Sprint added 39,000 new DSL (Digital Subscriber Line) subscribers during the three-month period.

The company, which is in the midst of merger deals with Nextel Communications and US Unwired, finished the quarter with $9.8 billion in debt.

Sprint expects its full-year revenue to grow by 3 percent to 4 percent from last year, driven by wireless gains. Full-year adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) will be between $8.7 billion and $8.9 billion, the company estimated, up from its previous range of $8.5 billion to $8.7 billion.

Sprint launched its EV-DO (Evolution Data Optimized) high-speed wireless data service in some markets during the quarter and expects it to cover half the U.S. population by early 2006, it said.

It continues to finalize details for its planned mergers with Nextel and US Unwired. It expects both transactions to close this quarter, it said.