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Thursday, 04/12/2001

FON - Sprint Corp.

Company Description

Sprint (NYSE:FON) is a global communications company - at the forefront of integrating long-distance, local and wireless communications services, and a large carrier of Internet traffic. Sprint built and operates the United States' first nationwide all digital, fiber optic network and is a leader in advanced data communications services. With annual revenues of more than $23 billion and serving more than 20 million businesses and residential customers, Sprint has more than 81,000 employees nationwide. Founded in 1899, the company maintains its world headquarters in Kansas City.

Sprint is comprised of the FON Group and the PCS group, representing the company's wireline and wireless businesses. The FON group represents Sprint's core wireline telecommunication operations, which include long distance, local telephone and product distribution, and directory publishing businesses. It also includes activities related to the development of Sprint Integrated On-Demand Network, and certain other ventures. The Sprint PCS Group consists of Sprint's wireless personal communications services operations.

(source: Sprint)

Reasons To Invest

The beaten down and beleaguered telecom sector may be an interesting place to begin snooping around for long-term investment ideas. As a whole, the telecom group has been beaten down over the past several years due to increased competition and subsequent decreased pricing power in long distance service. In addition, the major telecom providers had been on a huge spending spree for the last several years in an attempt to stay ahead of the curve by purchasing leading edge telecom equipment to build next-generation voice, video and data networks.

However, it appears that prices are stabilizing in the long distance business and prices of telecom equipment have drastically fallen in the last six months due to a massive inventory glut.

For its part, Sprint will obviously benefit from the two aforementioned events. Indeed, these two factors could act as a catalyst in the near-term to drive shares higher. But since our focus is on the long-term, we'll digress.

Sprint is aggressively pursuing the wireless enterprise network idea, which aims to increase productivity and decrease costs among corporate IT departments. It's a rather large market, and has little competition from the smaller regional concerns. Sprint's entrance into this new marketplace could have a very positive impact on its shares over the long-term.

Although Sprint's earnings have languished for some time due to the telecom-related issues, they may soon begin to accelerate to the upside as the fundamentals in the telecom sector begin to improve.

DRIP Information:

Shares to Qualify = 1           Accept Foreign Accounts: No
Auto-reinvestment  = No         Temper Enrollment Serv:  Yes

Min/Max Investment = $25 to $5,000/quarter
Reinvestment Fees: 
Dividend: 0              Cash: 0           Auto ReInvest: N/A

Transfer Agent:

UMB Bank, N.A.


Sprint Investor Information Line


Industry Group:         Telecom   52-week high=$67.00
Annual Dividend Per Share=$0.50   52-week low =$19.63
Last earnings 01/21    est=0.39   actual=0.41
Next earnings 04-17    est=0.37   versus=0.48
                                  P/E = 16
Analyst Ratings:
Strong Buy    = 2
Moderate Buy  = 8
Hold          = 4
Moderate Sell = 0
Strong Sell   = 0


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