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Alltel (NYSE: AT) was up US$1.59 at $54.70 early Thursday after the communications company announced a reorganization that includes 1,000 job cuts.
The company said it will reduce its operations to three geographical regions from five, with regional bases in Cleveland, Ohio; Charlotte, North Carolina; and Little Rock, Arkansas.
"This reorganization reaffirms Alltel's commitment to grab its share of the customer growth in the wireless business," said president and chief operating officer Scott Ford.
Over the past three years, Ford said, the company has doubled its workforce, adding more than 10,000 employees. According to the company, the job cuts will include both early retirements and layoffs.
The Little Rock, Arkansas-based company also predicted 2001 earnings per share of $3.20 to $3.35, with earnings from current businesses ranging between $2.85 and $3. Analysts had expected the company to earn about $2.97 per share.
Alltel said it expects to add 2.4 million to 2.5 million new customers this year, with a net gain -- after losing some subscribers -- of 500,000 to 550,000.
"As we enter 2001, it is imperative that Alltel have a flexible and responsive organization that can compete aggressively," said Ford. "We must continue to simplify and streamline Alltel's entire organization to maintain customer and earnings growth in an increasingly competitive environment."
Alltel reported net income of 62 cents per share on revenue of $1.8 billion for the fourth quarter ended December 31st. Wireless communications and "emerging businesses" were Alltel's strongest sectors during the quarter, the company said.
Alltel shares are down from a 52-week high of $73.38.
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