Reply #161: Sprint Shares Plummet After Job Cuts [View All]

NEW YORK (AP) -- Shares of beleaguered Sprint Nextel Corp. took a nosedive Friday after the nation's third-largest wireless carrier said it continued to lose subscribers at an alarming rate during the fourth quarter and will lay off thousands to cut costs.

A "meltdown," a "miserable performance" and "disaster" were some of the words analysts used to describe Sprint's predicament Friday. The company said it lost 683,000 postpaid subscribers during the quarter. Wall Street had expected a loss of about 250,000 to subscribers, according to Goldman Sachs analyst Jason Armstrong.

Sprint also announced plans to cut 4,000 jobs, close 8 percent of its retail locations and reduce its use of contractors and outsourced services. While investors have been expecting the company to outline a cost-cutting plan since its new CEO took helm, Armstrong said in a client note the cuts were already in the works under interim management.

"Hence, we would warn that new CEO Dan Hesse has yet to take his cut at the business," he wrote. "He has historically been aggressive on cost cuts and conservative on guidance, so look for more reductions when he finalizes his plan."

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http://biz.yahoo.com/ap/080118/sprint_nextel_mover.html?.v=1