Sprint Nextel Sticks a Fork in Forsee

Well, it sure didn't take long for the status of Sprint Nextel (NYSE: S  ) CEO Gary Forsee to change from going to gone. Only days after rumors circulated that the board of directors was searching for a replacement, the company announced that Forsee will step down immediately while temporary management keeps the seats of chairman and CEO warm for a new leader.

Sprint Nextel's board members made it clear that they will be looking outside the company for new blood, someone who can "guide the company to achieve its full potential." The board agreed with some vocal shareholders that if the company was still struggling nearly three years after the merger, changes needed to be made.

And still struggling may be an understatement. Along with the announcement of Forsee's departure, Sprint Nextel prepared investors for a really bad third quarter. The company said it expects to post a net loss of 337,000 post-paid customers for the past three months. Along with that, the company acknowledged that it will fall short of its guidance for operating income before depreciation and amortization (OIBDA) and revenue in 2007.

The poor numbers mean that this likely won't be a happy holiday season for Sprint Nextel. While competitors Verizon Wireless (a joint venture between Verizon Communications (NYSE: VZ  ) and Vodafone (NYSE: VOD  ) ), Deutsche Telekom's T-Mobile, and AT&T (NYSE: T  ) are all spending big bucks to advertise the latest Research In Motion (Nasdaq: RIMM  ) BlackBerry or other Apple (Nasdaq: AAPL  ) iPhone alternative, Sprint Nextel will be dealing with its leadership vacuum.

It wouldn't surprise this Fool if the company's partnership with Clearwire (Nasdaq: CLWR  ) to launch next-generation networks based on WiMAX  technology were reviewed as well. Investors have been critical of the millions that Sprint Nextel is pouring into the project, and it may be harder for new management to justify full speed ahead here while the core business remains in disarray.

The steep loss in customers shows that Sprint Nextel is far from being out of the woods in its turnaround attempt. While some analysts and investors -- including this Fool -- thought that the worst was behind the company, it appears much more work lies ahead.

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