Sprint Corp. (S) reported a net loss for the December quarter, ahead of its planned acquisition by rival telecom firm T-Mobile (TMUS). Meanwhile, a further uptick in wireless services pushed up third-quarter revenues, which also topped analysts’ forecast.
The Overland Park, Kansas-based company reported a net loss of $141 million or $0.03 per share for the third quarter, compared to a profit of $7.2 billion or $1.76 per share in the corresponding period of last year. The record net profit in the year-ago quarter is attributable to a $7.1 billion non-cash benefit from tax reform.
This time, the bottom line was negatively impacted by higher operating expenses, even though the company is making notable progress in its multi-year plan to improve the cost structure.
Net revenues moved up 4.4% annually to $8.6 billion aided by the strength of wireless services, which grew for the second consecutive quarter. The top-line also beat expectations. While revenues from equipment sale and equipment rentals advanced 26% and 25% respectively, service revenue dropped 4%, despite postpaid service revenue rebounding after a five-year slump. Postpaid net additions grew by 53,000 annually to 309,000.
While revenues from equipment sale and equipment rentals increased sharply, services revenue dropped 4%
The company said it is on track to roll out 5G services in the coming months, starting with nine prominent cities in the US. It also reaffirmed the adjusted EBITDA forecast for fiscal 2018 in the range of $12.4 billion to $12.7 billion. Full-year capital expenditure, excluding leased devices, is expected to be between $5.0 billion and $5.5 billion.
“Sprint’s strategy of balancing growth and profitability while we work toward regulatory approval of our T-Mobile merger is reflected in our fiscal third-quarter results. We delivered solid financials, increased network investments as we prepare for our mobile 5G launch, and continued the digital transformation of the company,” said CEO Michel Combes.
The previously announced merger deal, under which Sprint will be acquired by T-Mobile for $26 billion, is expected to close in the first quarter of 2019. The combination is expected to better position the companies to compete with AT&T (T) and Verizon (VZ).
Sprint shares moved up about 13% in the past twelve months. The stock, which closed the last trading session higher, dropped slightly after the earnings report.
Shares of FedEx Corporation (NYSE: FDX) were up 1% on Tuesday. The stock has dropped 44% year-to-date and 34% over the past 12 months. The company delivered mixed results for
After a soft start to the year, the IPO market has witnessed muted activity so far though a few big companies entered the stock market. On the heels of AIG
After a prolonged slowdown, the restaurant industry is returning to normal patterns but macroeconomic uncertainties and high inflation are currently playing spoilsport for it. While the pandemic-related slump forced many