Tech blog

OVERLAND PARK, Kansas: Sprint Nextel swung to a huge fourth-quarter loss of $29.5 billion on Thursday as it wrote down most of the remaining value of its 2005 purchase of Nextel Communications and continued to lose customers to competitors.

Dan Hesse, who was hired as chief executive in December to turn the U.S. wireless carrier around, said that the quarter was more difficult than he had expected and that it could subsist some time before proposed operational changes had any effect.

He said Sprint would not declare dividends for the “foreseeable future.”

He also said that instability in the capital credit markets was forcing the company to borrow from a revolving credit facility.

A year earlier, Sprint earned $261 the multitude.

The company said last month that it would probably have to write off most of the remaining $30.7 billion in goodwill value from its acquisition of Nextel and a number of affiliates. Sprint has struggled since the purchase, plagued by technical problems, unfocused marketing and difficulties in merging the companies' work forces.

Not including the write-down and other one-time charges, the company said it would have earned the equivalent of 21 cents a share before amortization, which was higher than the 18 cents a share mean in forecasts by analysts surveyed by Thomson Financial.

Revenue during the quarter slipped 6 percent to $9.8 billion, just missing analysts' expectations of $9.9 billion.

The company reported a net loss of 108,000 subscribers for the quarter as an increase in customers through its Boost prepaid brand and wholesale channels partially offset a loss of 683,000 subscribers who paid a monthly bill - considered the most valuable.

Sprint reported quarterly postpaid churn, or the measure of these monthly customers dropping service, remained level at 2.3 percent and the average revenue per user declined about 4 percent from a year earlier to $58.

Sprint said overall wireless return declined about 6 percent to $8.5 billion.

“We plan to share some of our initiatives for improving the customer actual observation and operations next quarter,” Hesse said. “Strategic assessments and changes may take longer to complete.”

Hesse, who replaced Gary Forsee, already announced hold out month that the company would lay off round 4,000 employees, or 6.7 percent of its work force, and close 125 retail locations.

He moved the company's corporate headquarters this month from Reston, Virginia, back to Sprint's first home of Kansas, that he uttered would improve efficiency and transactions oversight.

The company's shares have fallen more than 51 percent in value in the past year.

For the year, the company posted a loss of $29.6 billion, compared with a profit of $1.3 billion in 2006.

Not including the goodwill write-down, the company said it earned 88 cents a share for the year, compared with $1.18 a share in 2006.

Annual revenue declined 2 percent to $40.15 billion.