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Positive trend moves Sprint into favorable analysis spotlight

DAVID HAYES - 31 August 2004 - The Kansas City Star

For those who watch the telecommunications market, there seems to be a growing consensus that Sprint Corp. is doing something very right.

You see it in reports written by financial and industry analysts, and on the pages of newspapers such as USA Today. That newspaper, for instance, couldn't have been much more positive after interviewing Sprint CEO Gary Forsee earlier this month. USA Today's take:

"After surviving some of the most treacherous years in telecom, Sprint is beginning to thrive and even move to the head of its competitive pack. You can almost compare Sprint to Lance Armstrong."

What a difference a couple of years make.

While Sprint was a favorite target of analysts and the media a couple of years ago, now the same groups are lining up to give the company a proverbial slap on the back.

It turns out there's a reason.

Sprint still isn't the darling of Wall Street that it was in the '90s. But the Overland Park company definitely has the Street's attention. Shares of Sprint are up about 36 percent from a year ago.

Sprint's current market cap is $27 billion. That's more than the street value of AT&T Corp., former Baby Bell Qwest Communications, MCI Corp. and Level 3 Communications -- all together.

And then there's cash. Cash still talks, and Sprint is awash in green. Following a complicated securities deal that was completed earlier this month, Sprint has more than $4 billion in cash on hand.

A large part of the cash will go toward the company's declining, but still hefty, long-term debt. Forsee promised Wall Street he'd cut Sprint's debt to $13 billion by the end of this year.

He shouldn't have a problem. Sprint's net debt stood at $15.6 billion on June 30.

There are some other contributing issues worth pointing out. Sprint quietly moved from its longtime position as the fourth largest wireless company to the No. 3 spot during the second quarter, pulling ahead of AT&T Wireless.