Daniel R. Hesse, Sprint NextelÃ¢â‚¬â„¢s new chief executive, announced that the company had a $29.5 billion write-down in the fourth quarter.
Following the news, SprintÃ¢â‚¬â„¢s stock slid more than 9 percent after the international company announced a $29.5 billion fourth-quarter loss related with the Nextel Communications merger.
Sprint Nextel also announced it was suspending the payment of its dividend and had borrowed $2.5 billion through a revolving credit facility. Mr. Hesse has been Sprint Nextel’s new chief executive for the troubled company for two months.
“We have plenty of cash on hand,” he answered when asked if Sprint Nextel could face bankruptcy.
Coming November, Sprint has $1.25 billion in bonds maturing as well as $600 million coming due in 2009.
Analysts were not surprised by the company’s poor showing because they have warned of weak earnings amid a slowing economy. However, Mr. Hesse blamed the companyÃ¢â‚¬â„¢s troubled situation on Sprint’s management.
The $29.45 billion loss, which totals out to $10.36 a share, contrasted with a profit of $261 million, or 9 cents a share, in the quarter a year earlier. SprintÃ¢â‚¬â„¢s fourth-quarter revenue was $9.85 billion, down from $10.44 billion in the period in 2006.
Mr. Hesse also said Sprint would begin offering a $100 service plan that gives customers unlimited calls, text messages, Web access and GPS navigation on their mobile phones.
AT&T and Verizon announced similarly priced wireless plans last week.