Company reports net income of $1.67 billion Sprint on Monday reported net income of $1.67 billion for the first quarter of 2003, a dramatic increase from $140 million a year ago that was fuelled by the sale of part of its business. Adjusted earnings for the quarter fell slightly short of analysts’ expectations.Most of the jump in net income came from the sale of Sprint’s directory publishing business for $1.31 billion, while a further $258 million came from a change in accounting principles. The net income figure translated into operating income of $604 million, up 17 percent from a year ago. Net operating revenue for the quarter was $6.34 billion, down from $6.64 billion a year ago.Sprint’s telecommunications group, the FON Group, posted net income of $1.85 billion for the quarter, on net operating revenue of $3.58 billion. The FON Group posted net income a year ago of $286 million. Earnings per share for the FON Group came in at $2.06, up from $0.32 a year ago, with adjusted earnings per share at $0.34, slightly lower than the consensus analyst estimate of $0.35, according to Thomson First Call, the investment research network. Sprint’s PCS Group wireless division posted an adjusted loss of $0.16 per share, while analysts had been expecting a loss per share of $0.13, according to Thomson First Call. But executives there trumpeted “encouraging signs” of 3.5 percent growth in net operating revenue and 24 percent growth in operating income from a year ago. The company predicted positive cash flow for the PCS Group by the end of 2003.The PCS Group posted a loss of $182 million for the quarter, compared to $146 million a year ago.Sprint also cut back on its revenue expectations for the rest of the year, saying demand for telecommunications services are likely to lag behind any improvements in the general economy. The company said it expects full-revenue to decline 8 percent to 10 percent, instead of a mid-single-digit decline. Total operating income for the year should be between $1.75 billion and $1.85 billion, instead of the company’s earlier estimate of $1.8 billion to $1.9 billion. But Sprint expects the PCS Group to post $200 million in free cash flow, instead of breaking even, and executives also noted that increased cash flow this quarter allowed Sprint to reduce its debt by $1.56 billion and increase its cash by $1 billion.Gary Forsee, the new chief executive officer at Sprint, said the company “performed admirably” in a challenging economy. “We’re on track with our financial plan,” he said during a conference call to discuss the results. “Sprint is on solid ground financially and getting stronger.”The telecom industry is suffering from low demand caused by a “lull in the business cycle,” he said, but he was confident the company could turn around slow revenue growth. Sprint, based inOverland Park, Kan., plans to use its national telecommunications and wireless networks to push for additional customers, Forsee added. “Overall, Sprint is positioned very well to win in this marketplace,” he said. “I’m confident that now is Sprint’s time to seize on its operational and financial progress … and take advantage of our unique set of assets.”Forsee, formerly the No. 2 executive at BellSouth, was named Sprint’s CEO a month ago, after outgoing Chairman and CEO William Esrey and President and Chief Operating Officer Ronald LeMay were asked by the Sprint board to step down because of their use of a tax shelter watched closely by the U.S. Internal Revenue Service. The two were planning to stay with the company during a transition period. Technology Industry