Through TheFLY's Eyes: Sprint Nextel Corporation
Management Being Perpetually Whipsawed
Sprint Nextel (S) hit its numbers this morning but guided to flat results for the rest of the year-- essentially turning Sprint-Nextel into a no growth business. The only positive in the quarter was solid margin improvement. These are the points we blogged about Sprint after visiting its retail stores earlier in the year:
* Employees were battling in front of customers over different commission rates
* Computer systems were completely obsolete
* Employees were complaining that pricing updates came over the system during peak customer traffic periods, essentially rendering the computers useless.
As a result of the above, the big factor in Sprint's miss was higher churn versus its competitors (2.1% vs 1.7% for Cingular). Sprint management during today's conference call indicated that it began putting in place improvements only 30 days ago. Way after we wrote our piece. So much for forward-thinking management.
In addition, Sprint is just catching up with Motorola's success it is having with its new phones. The big product for the fourth quarter will be Motorola's Q product and investors have to question whether Sprint will be ready for that launch.
Gary Forsee, Sprint's CEO, had been a long-time right-hand man at Sprint before taking the helm. He left Sprint for a while to head a turnaround at Waste Management, but he jumped ship almost immediately and came back to Sprint. As head of these two large companies, he has had rocky roads. The investment community has to seriously question his leadership capability.