Fourth quarter 2005 reported revenues increased 63% compared to the year-ago period

February 22, 2006

3 Min Read

RESTON, Va. -- Sprint Nextel Corp. (NYSE: S) today reported fourth quarter and year-end 2005 financial results. In the fourth quarter the company reported strong growth in Wireless and solid performance in Local and Long Distance.

Fourth quarter 2005 diluted earnings per share were $0.07 compared to $0.29 for the fourth quarter of 2004. The reported earnings in the fourth quarter 2005 include dilution of $0.08 from special items and $0.18 from amortization expense, which is predominately merger-related. Adjusted EPS before Amortization*, which removes the effects of these items, was $0.33 compared to $0.32 for the fourth quarter 2004. The increase in fourth quarter Adjusted EPS before Amortization* was aided by double-digit year-over-year Adjusted OIBDA* growth in Wireless, which was partially offset by increased depreciation expense and a higher income tax rate.

Fourth quarter 2005 reported revenues increased 63% compared to the year-ago period. Revenues were up 7% compared to the prior period pro forma results. On this same basis, Adjusted OIBDA* increased 7% and Adjusted Operating Income* was up 4%. Fourth quarter Free Cash Flow* was $1 billion.

For the full year, diluted earnings per share were $0.87 compared to a loss per share of $0.71 in 2004. The full year pro forma Adjusted EPS before Amortization* was $1.41 compared to $1.04, a 36% improvement.

Full year 2005 reported revenues were $34.7 billion, a 26% increase over 2004. On a pro forma basis, full year revenues of $44.1 billion increased 8% compared to 2004. On this same basis, Adjusted OIBDA* increased 9% to $14.2 billion while Adjusted Operating Income* of $4.8 billion in 2005 reflects a 40% increase.

"Our performance in the fourth quarter capped off a very exciting year for our company," said Gary Forsee, Sprint Nextel president and chief executive officer. "For all of 2005, we exceeded key financial goals that Sprint and Nextel each established at the start of the year and the goals we set for our combined company. This is particularly impressive when you consider that we were simultaneously undertaking the integration of two substantial organizations, building a new brand, preparing for the launch of EMBARQTM, which will be a new Fortune 500 company when the local communications operations separate from Sprint Nextel; introducing exciting new wireless data services, establishing a game-changing relationship with leading cable companies, and acquiring PCS affiliates and Nextel Partners.

"In the fourth quarter, we increased our share of customer decisions and subscriber growth in the wireless business and we again outperformed our peer groups in wireline. Wireless data revenues continued to grow at a very strong rate and the data contribution to Average Revenue Per User increased by a double-digit percentage sequentially. In the quarter our Local operations provided strong cash production and for the full year this contribution grew 11%. Local also finished off the year with strong momentum in high-speed Internet services. In Long Distance, we had double-digit growth in MPLS services and the growth in the number of cable-telephony customers utilizing our facilities was our highest ever.

"Our targets for the coming year call for a continuation of solid Wireless growth that is expected to be partially offset by a lower contribution from Long Distance. With our merger integration efforts well under way, we continue to gain confidence in our synergy plans and we expect to achieve operating synergies of nearly $1 billion in 2006. Given the substantially improved visibility into our net future cash resources, we now expect to continue to pay nominal quarterly cash common stock dividends following the planned second quarter separation of the local communications operations to our shareholders. The amount of this dividend will be determined by our board. In the future, the board also may consider additional cash distributions in the form of share buybacks or special dividends, subject to tax restrictions related to the separation. No plans for such distributions have been made at this time," Forsee said.

Sprint Corp. (NYSE: S)

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like