Sprint reported Q1 operating income of $604 million, up 17% from last year. Overall net operating revenue for Q1 was $6.339 billion, compared to $6.637 billion for Q1 2002. Cash flow improved significantly in the first quarter of 2003 compared to last year, allowing Sprint to reduce debt by $1.56 billion during the quarter and to increase cash by more than $1 billion. Sprint ended the quarter with a cash balance of $2.10 billion. This cash performance was aided by $2.22 billion in proceeds from the sale of Sprint’s directory publishing business. Some highlights of the quarter:
- Data services revenues decreased 5% year-over-year primarily due to a decline in private line. Growth in dedicated IP and hosting revenues were offset by a substantial decline in dial IP.
- Sprint’s local division added 34,000 DSL customers in Q1, giving it a total of 185,000 lines in service.
- Sprint PCS added 483,000 net mobile phone accounts. Mobile ARPU was just under $59 in Q1, compared to $62 in Q4 2002 and $60 in the first quarter a year ago. An increase in the average monthly recurring charge was more than offset by lower overage charges and a decrease in the affiliate travel rate. Average customer usage in the quarter was a little over 11 1/2 hours per month compared to 11 hours per month in the fourth quarter.
Sprint also updated its 2003 guidance. Sprint now expects overall revenues to decline 6 – 7% for the full year. Global markets division revenues are expected to decline 8 -10% and local telecommunications division revenue is expected to be flat to down modestly. Capital expenditures are expected to be approximately $2.0 billion. In 2003, the global markets division has targeted capital of $600 million, and the local division capital plan is $1.3 billion.
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