Sprint to cut 5,000 jobs; sales forecast falls short

Sprint Nextel, the third-largest U.S. wireless-phone carrier, will cut about 5,000 jobs this year and forecast 2007 sales that may miss analysts' estimates.

The shares dropped 7 percent in extended trading after Sprint said sales in the year ending in December will be $41 billion to $42 billion, compared with the $42 billion average estimate of 26 analysts surveyed by Thomson Financial. Revenue in 2006 was $41 billion, Sprint said.

Sprint said 306,000 customers defected in the fourth quarter, extending losses from the third period. Sprint struggled to keep subscribers after the merger of Sprint and Nextel Communications.

"The integration is taking longer than originally anticipated," said Michael Nelson, an analyst at Stanford Group in New York. "This is an acknowledgment by management that there still needs to be further restructuring in the business to turn this thing around."

Sprint shares dropped $1.44 cents to $18.20 in extended trading, after rising 43 cents to $19.64 in the regular session.

Chief Executive Officer Gary Forsee, who ousted his deputy, Len Lauer, in August, vowed in October to turn the slide around. The company is reviewing its advertising agencies and will make a decision this quarter. In the meantime, marketing initiatives will be "aggressively pursued," the company said in the statement.