Sprint Reports First Quarterly Profit In Three Years

Sprint Corp. (NYSE:S) reported a quarterly profit for the first time in three years for the first quarter of its fiscal year. The company reported net income of $206 million, or 5 cents per share in the first quarter ended June 30. In the same quarter of last year, the company reported a loss of $302 million, or 8 cents per share.

Net operating revenue was $8.16 billion, higher than the $8.01 billion recorded a year ago. According to Thomson Reuters I/B/E/S, analysts expected a net loss of 1 cent per share on revenue of $8.11 billion.

Sprint added 88,000 subscribers who pay a monthly phone bill in the quarter, compared to 173,000 net additions in the same period a year ago. It gained prepaid customers compared with a loss the year before. Sprint is the No. 4 U.S. wireless carrier and is majority owned by Japan’s SoftBank Group Corp.

Sprint reported it cut its cost of services and selling, general and administrative expenses by about $370 million in the quarter. The company expects an additional $1.3 billion to $1.5 billion of year-over-year reductions in fiscal 2017. Sprint shares jumped more than 10 percent on Tuesday after the announcement. Shares rose 82 cents to $8.82 in morning trading. The shares had fallen 5.2 percent this year through Monday.

Sprint Chief Executive Marcelo Claure said in an announcement that merger talks should come in the “near future.” The company is exploring several options, including a merger with rival carrier T-Mobile US Inc. and a tie-up with cable provider Charter Communications Inc. He said, “We have plenty of options, and we’ve had discussions with a lot of different parties.”

He also noted that “everybody has shown a high level of interest in evaluating Sprint as a potential merger partner.” However, earlier this week, Charter said it was not interested in buying Sprint. Now, SoftBank Chief Executive Masayoshi Son is reportedly considering making an acquisition offer for Charter to combine it with Sprint as early as the end of August.

Claure that the cost savings and potential benefits of merging with another phone company or a cable company would leave Sprint in a better position. Sprint has booked a decade of losses and piled up about $41 billion in debt. Claure would not give specifics on merger discussions on the company’s post-earnings conference call.

Be the first to comment on "Sprint Reports First Quarterly Profit In Three Years"

Leave a comment

Your email address will not be published.


*