Sprint posts disappointing 4Q results, shares plunge

Shares of Sprint Nextel Corp tumbled after wireless carrier said it continued to lose subscribers at a startling rate during the fourth quarter and is looking to cut costs by axing about 4,000 jobs. Stock dropped nearly 25 per cent.

The nation's third-largest wireless carrier revealed that it lost 683,000 postpaid subscribers during the fourth quarter alone. It was far above the analysts’ estimate of a loss of 350,000 to 500,000 subscribers.

Post-paid customers are more valuable to the company since they pay monthly bills and are often on a contract. In five of the past six months, Sprint has reported the loss of such subscribers.

The quarter, which is usually the strongest for cellphone carriers, also saw Sprint losing 202,000 pre-paid customers. In all it was a loss of 885,000 customers in three months for Sprint.

The company which currently employs 60,000 people announced plans to cut 4,000 jobs, close 8 percent of its retail locations and reduce its use of contractors and outsourced services.

The move was largely expected to come as the new CEO, Dan Hesse tries to get the trouble carrier back on track.

Sprint, the No. 3 wireless carrier after AT&T and Verizon Wireless, has been struggling since its merger with Nextel in 2005. The $70 billion merger, under Hesse's predecessor, Gary Forsee, was supposed to create a wireless behemoth that could steamroll the competition while pushing boundaries in wireless.

Hesse took over the post of Sprint CEO in December after Gary Forsee was ousted because of a succession of quarters of falling subscriber numbers and other operational troubles for the company.

Sprint's shares went down $2.87, or 24.8 percent, to $8.70 on Friday. The stock has lost more than one-third of its value in 2008. Earlier in the day, the shares hit $8.15, their lowest since 2002.