Subject: [NEXTEL-1] DJ UPDATE: Nextel 4Q Net Down 56% (Timmy Is In Trouble)

From: Marcelrf <[email-masked]>
Date: Thu, 19 Feb 2004 13:19:09 -0500

DJ   UPDATE: Nextel 4Q Net Down 56% (Timmy Is In Trouble)
(2004/02/19 10:57AM)

   By Nick Baker
   Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Nextel Communications Inc. (NXTL) said fourth-
quarter net income dropped 56% versus the prior year, when results
were inflated by the mobile-phone carrier's paring of its stake in
NII Holdings Inc.

Nextel, Reston, Va., posted a profit of $640 million, or 55 cents a
share, versus $1.47 billion, or $1.37 a share, during the year-
earlier period. Revenue jumped 29% to $3 billion from $2.3 billion.

Nextel said its favored financial measure, free cash flow, surged
tenfold in 2003 to $1.3 billion and the firm projected $1.6 billion
in free cash flow in 2004. Companies can use free cash flow to pay
off debt and make capital expenditures.

Despite new rules that let mobile-phone customers take their
telephone numbers with them when they switch carriers, Nextel added
more customers during the period compared with last year's fourth
quarter - 553,000 versus 503,000 additions. That was a decline,
however, from 646,000 additions during the third quarter, before the
new rules went into effect.

Nextel finished the year with 12.9 million customers, a 22% surge
from 10.6 million at the end of 2002. Nextel expects to have at
least 14.7 million subscribers and to generate at least $2 in per-
share earnings this year.

Last year was "a marvelous year for Nextel, the best in our
history," Chief Executive and President Timothy M. Donahue said.

Nextel made $1.8 billion in capital purchases in 2003 and plans $2.2
billion in 2004 as it deploys more high-speed data services and
builds 2,200 towers to expand network coverage.

In an interview, Nextel executives declined to comment on whether
the firm weighed a bid for AT&T Wireless Services Inc. (AWE), which
Cingular Wireless LLC agreed this week to buy for $41 billion.

During a conference call, Donahue said his company is "more than
comfortable" with its ability to remain independent.

Once AT&T Wireless gets swallowed up, Nextel, facing one less
competitor, will be able to capitalize on its unique position of
catering to mobile customers who are willing to spend more money on
service than the average subscriber, Donahue explained.

"We will see what happens in the world of consolidation," he
said. "Right now our focus is for great results to exceed
expectations for '04, and we will see what happen as we march down
the road."

The bulked-up Cingular, which is owned by Baby Bell local-phone
companies SBC Communications Inc. (SBC) and BellSouth Corp. (BLS),
would be the No. 1 mobile-phone company in terms of subscribers.

SBC and BellSouth's interest in expanding their wireless business
underscores how important that industry is to their long-term
health, Nextel Chief Operating Officer Tom Kelly said during an
interview.

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