Sprint Corp's shares plunged, dragging down rivals' stocks, after the third- biggest US long-distance telephone company said sales and wireless-customer growth this year will lag forecasts.
Shares of Sprint's PCS Group mobile-phone unit, the nation's fourth-biggest wireless carrier, slid 27 percent, while stock of the company's local and long-distance business declined 18 percent. AT&T Corp and AT&T Wireless Services Inc also fell.
Wireless stocks have tumbled on concern about slowing subscriber growth, while long-distance shares have fallen on lower sales. Sprint said yesterday long-distance and local-phone revenue will drop at a faster-than-expected rate this year. It will add 10 to 15 percent fewer wireless users than the 3 million it forecast, partly because of price competition and new credit policies.
"This is a sign they're not just going to cut prices to get customers," said John Maxwell, an analyst at Waddell & Reed Financial Inc, referring to Sprint PCS. The firm owned 1.35 million shares of Sprint PCS and 4.46 million shares of Sprint FON Group, the long-distance unit, as of March.
US mobile-phone companies will see customer growth of 14 percent this year, the slowest rate since the industry began in 1985, Prudential Securities Inc has said. Sprint PCS added about 4 million new users lat year.
Sprint said revenue at its local and long-distance business will drop at a mid-single-digit percentage rate this year.
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