The inevitable has finally happened: Sprint Nextel CEO Gary Forsee is out. Maybe it was the lackluster earnings. Maybe it was the customer service debacle. Maybe it was this stock chart.
In any case, Forsee is gone. Who will Russell Shaw pick on now?
According to a statement, Sprint Nextel named James Hance Jr., a board member to be the non-executive chairman of the board. Paul Saleh, current CFO, will become CEO until a replacement is found for Forsee.
The company thanked Forsee for his contributions since taking the helm at 2003, but I'm left wondering about the following:
- What does this mean for Sprint's WiMax network?
- Was the Nextel acquisition the biggest disaster ever?
- Does a new CEO stand a chance against AT&T and Verizon Wireless?
To get all of the bad news out of the way, Sprint also issued a profit warning. Sprint said it expects a loss of 337,000 post paid subscribers in the third quarter. The company expects "OIBDA" of $11 billion to $11.5 billion for 2007. Yes folks OIBDA is a creative acronym that stands for operating income before depreciation, amortization, restructuring and asset impairments and special items. If EBITDA means earnings minus all of the bad stuff OIBDA is something like "operating earnings minus the kitchen sink." Sprint projects annual revenue of $41 billion to $42 billion for the year.
Those OIBDA projections, which largely rely on a fictional non-GAAP measurement, are a bit below estimates.