Shares sank after CEO Daniel Hesse candidly admitted the telecom's troubles were far from overDaniel Hesse's coming-out party was anything but festive.
Two months into his new job as chief executive of the troubled wireless operator Sprint Nextel (S), Hesse oversaw his first quarterly earnings report and analyst call. His message was as blunt and depressing as a Sylvia Plath poem: A turnaround of the No. 3 U.S. wireless operator is not going to happen any time soon. "I now have had two full months at the helm, and to be perfectly frank, the issues we face are more difficult than what I had expected to find," Hesse said on a Feb. 28 conference call following yet another dismal quarter. "This turnaround will not happen for many quarters." Sprint shares fell more than 10%, to close at 8.03, a new 52-week low. The last time Sprint touched $8 was in February, 1989.
There was so much bad news it's hard to know where to begin. Customers, fed up with horrible customer service, continue to flee Sprint in droves. The company confirmed a staggering $29.7 billion writedown, wiping out nearly all of the value of its $35 billion merger with Nextel Communications. And dividend payments were suspended "for the foreseeable future."
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