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Published: Thu, August 03, 2017
Economy | By Melissa Porter

Sprint profitable for first time in three years

Sprint profitable for first time in three years

Verizon's launch of an unlimited data plan hurt Sprint's subscriber numbers during the quarter, Claure conceded, but Sprint added 115,000 new customers in July as the market calmed.

The company added 88,000 postpaid customers during the quarter, marking the eighth straight quarter of growth on the front.

"There's a lot of different goodness to it", Claure said on a call with reporters after the results were released.

"Letting go of Sprint is not an option - this consolidation [push] is an offensive measure", a SoftBank executive asserted. CEO Marcelo Claure credited the company's ongoing cost-cutting initiatives, which have seen Sprint slash spending by almost $4 billion over the last nine quarters.

This merging will bring together the fourth largest mobile carrier company with the second largest cable company.

However, in an email to The Register on Tuesday, a spokesperson for Charter shot down speculation that it will snap up Sprint from Japanese giant Softbank.

Shareholders were impressed. Sprint's stock jumped 10% at midday on Tuesday, putting it in positive territory for the year with a total gain of 5% in 2017. Claure made no effort to narrow investors' thinking down to a particular partner or even a specific target industry, but he sounded optimistic about the prospect. Charter has publicly said it's not interested in acquiring Sprint, and talks with T-Mobile were on hold in July while Sprint was in exclusive talks on a reselling deal with cable partners. "And that deal is going to benefit most of Sprint shareholders". The cost savings led to a small increase in the low end of Sprint's forecast EBITDA range for the year, to United States dollars 10.8-11.2 billion from USD 10.7-11.2 billion previously.

Sprint posted its first net profit in three years in its fiscal first quarter to June, and EBITDA rose to its highest level in almost 10 years. The offer accounted for just 1 percent of new customers, the CEO said.

"The obvious risk in so openly courting one potential suitor after another is that Sprint will increasingly be viewed as damaged goods", he wrote in a research note to analysts.

The telecom company reported net income of $206 million and its highest Ebitda in almost 10 years of $2.9 billion in its fiscal first quarter. Analysts expected a loss of $79.9 million. The company is having discussions with other companies, he said. "Like an unsold house that has sat too long on the market, as asset that has been shopped too often without success takes on an air of taint".

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