NEW YORK - Sprint Nextel Corp. Chairman and Chief Executive Gary Forsee resigned Monday as the board expressed disappointment with the financial results of the nation's third-largest wireless carrier. Sprint also lowered its financial forecast for the current quarter.
'It is the right time to put in place new leadership to move the company forward in improving its performance and realizing corporate objectives,' board member Irvine Hockaday said in a company statement.
The board said it was searching for a replacement for Forsee, who was also president. In the meantime, Director James Hance Jr. will be acting nonexecutive chairman, and Chief Financial Officer Paul Saleh will serve as acting CEO.
Also Monday, Sprint Nextel said it expects to report a net loss of approximately 337,000 monthly subscribers in the third quarter. Its operating income, excluding some items, is expected to fall below the previously forecast range $11 billion to $11.5 billion. Revenue is expected to fall below the earlier forecast of $41 billion to $42 billion.
Sprint Nextel shares closed Monday at $18.50, down 51 cents or 2.7 percent. In extended trading, after the announcement of Forsee's departure, the shares gained 45 cents.
The resignation confirms newspaper articles, citing anonymous sources, that said Forsee's departure was imminent. USA Today reported in Monday's edition that Sprint's board, spurred by disappointing second-quarter earnings, had decided to speed up efforts to replace Forsee after its work to find a replacement was made public last week by The Wall Street Journal.
Forsee took over the nation's third-largest wireless provider in 2003 and was a driving force behind the acquisition of Nextel Communications Inc. in August 2005
However, the company has struggled after the merger, and its stock price has dropped 27 percent. Amid technical problems and a sometimes unfocused marketing strategy, Sprint Nextel has steadily lost ground to competitors AT&T Inc. and Verizon Wireless in attracting and retaining customers. Nextel's phones, known for their 'push-to-talk' feature, aren't directly compatible with Sprint's network.
Most recently, Forsee has hung the company's future on the development of WiMax, a fourth-generation mobile data network the company claims will provide wireless download speeds comparable to DSL or cable modems. It aims to connect not only cell phones but computers, video cameras and other gadgets. Wide-scale commercial application is still years away.
The Journal said company directors began looking for Forsee's replacement in August, around the time Sprint Nextel announced smaller second-quarter profits and that it would continue to struggle in the second half of the year.
Sprint Nextel is formally based in Reston, Va., Nextel's old base, but maintains operational headquarters in Overland Park, Kan., Sprint Corp.'s hometown.
Acting CEO Saleh, 50, comes from the Nextel side, where he was the chief financial officer. Before that he was treasurer of The Walt Disney Co. and Honeywell International Inc.
Acting chairman Hance, 63, is the former vice chairman of Bank of America Corp. He has been on the Sprint Nextel board since February 2005.