Sprint Corp raised forecasts for its cellular and wireline phone businesses this week and increased its free cash flow estimate for the year by half a billion dollars.
The Overland Park, Kansas-based operator said revenues at its PCS cellular unit should grow 25% this year to $12bn, with revenue growth in the mid to high single digits next year. Ebitda this year should be at least $2.8bn, compared to earlier estimates of $2.7bn. Its fourth quarter ebitda will be boosted by improved collections and reduced bad debt expenses. Ebitda next year should be $3.3bn to $3.4bn. Operating income should be $500m, up $1.1bn on 2001. It should hit $800m to $900m next year. Capex should be $2.8bn, down $300m from earlier estimates. Next year capex should be $2.3bn to $2.4bn.
Sprint’s FON group should generate revenues of $3.7bn in the fourth quarter, and $15.2bn for the year as a whole. Next year revenues should decline to $15bn. Fourth quarter revenues for its local telecommunications division should be flat to slightly down year on year, Full year revenues next year will be flat on 2002. Revenues in its global markets division will slip 6% to 7% in the fourth quarter. Full year 2003 revenues will slide in the mid-single digits next year. However, it expects fourth quarter earnings per share of $0.37 to $0.39 compared to earlier guidance of $0.34 to $0.36. Full year earnings per share will be $1.35 to $1.37. Full year earnings next year should be $1.40 to $1.45. Ebitda for 2002 should be around $4.5bn, and will be about the same next year. Operating income this year will be around $1.9bn, and will be flat to down modestly next year, or up in the mid single digits excluding pension costs. Capex will be $2.2bn this year, $100m lower than expected, and will increase to $2.3bn next year.
Sprint’s overall free cash flow this year should come in at $1bn, up $500m from its previous estimate. The company said its planned net debt reductions over the next two years have increased significantly.