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Sprint Details $365M in Charges

Sprint Corp. (NYSE: FON) announced on Monday evening that it would take some $365 million in one-time charges against earnings as it realizes the impact of layoffs and decides to shelve development of a new billing system for its wireless group. The charges will come in the fourth quarter.

Sprint also said it may yet combine its tracking stocks -- uniting the company under one ticker symbol -- after February 4.

The carrier is taking a fourth-quarter charge of about $65 million related to the 2,000 jobs the company is cutting (see Sprint Lays Off 2,000). The cuts will save more than $125 million a year, Sprint says.

Sprint Wireless (NYSE: PCS) is taking a $300 million charge for asset impairment because of its decision to terminate the development of a new billing system for its wireless customers. Excluding the $300 million charge and other one-time charges, Sprint says the fourth-quarter losses in its wireless group will be "at the low end of previous guidance of 43 to 48 cents a share."

Sprint has scheduled its fourth-quarter earnings release for Feb. 3 and its annual investment community meeting for Feb. 4. The company says its board won't make a decision on the possible combining of its wireless and wireline tracking stocks until after the Feb. 4 meeting. "The company believes internal and external factors are continuing to develop in a manner that makes a recombination likely," said Sprint CEO Gary Forsee, in a statement on Monday.

Analysts expect that Sprint's wireline group will bring in about $3.5 billion in revenues for the fourth quarter, according to Reuters Research. Despite the one-time charges, Sprint still expects its wireline unit to earn $1.43 to $1.45 per share on an adjusted basis in 2003.

Sprint's wireline group shares closed up $0.07 (0.47%) to $15 in trading on Monday.

— Phil Harvey, Senior Editor, Light Reading

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