Sprint Profit Drops as Nextel Is Absorbed

Sprint Nextel Corp. posted a 55% drop in fourth-quarter profit on costs to absorb Nextel Communications Inc.

Net income fell to $197 million, or 7 cents a share, from $437 million, or 29 cents, a year earlier. Sales rose 63% to $11.3 billion, Reston, Va.-based Sprint Nextel said.

Costs to integrate Nextel, which Chief Executive Gary Forsee bought for $36 billion, lowered profit by $204 million.

The results disappointed investors who anticipated the company would add more mobile-phone customers who use monthly billing plans rather than pay in advance.

Excluding costs related to the Nextel acquisition, hurricanes and restructuring, fourth-quarter profit would have been 33 cents a share, missing the 34-cent average estimate of analysts surveyed by Thomson Financial.

Shares of Sprint Nextel fell $1.13, or 4.5%, to $23.80. It was the largest percentage decline since Feb. 4, 2004.