Sprint Posts Rare Profit, Says A Deal May Be Coming Soon
OVERLAND PARK, Kan. (AP) — Sprint said Tuesday (July 31) that it should be able to “strike a deal” in the “near future,” driving up shares of the fourth-largest U.S. wireless carrier.
The Overland Park, Kan., company also posted its first quarterly profit in three years as it cut costs.
Debt-heavy Sprint has been trying to turn its business around, and CEO Marcelo Claure said on a call with analysts Tuesday that it could “sustain itself” alone. But he said that the cost savings and potential benefits of hooking up with another phone company or a cable company would leave Sprint in a better position. Claure said that “we think in the near future, we should be able to strike a deal with one of the different players.”
Earlier this week, cable company Charter said it was not interested in buying Sprint after published reports said Sprint had proposed an acquisition by Charter. Claure said he was “a bit surprised” to see that announcement and that Charter talks were part of a “bigger play.” The company is having discussions with other companies, he said. A deal with rival T-Mobile has long been predicted.
Sprint has long sought a deal as it is unprofitable and the wireless market has gotten more competitive. Most Americans already have a cell phone, and carriers have been trying to lure them with discounts and the return this year of unlimited-data plans. Sprint has offered some big promotions recently, like a year of free service.
The company has also made a big splash in the music world this year after purchasing a 33 percent stake in Jay-Z's Tidal music streaming service in January in a deal worth $200 million. The music mogul's latest album, 4:44, debuted atop the Billboard 200 chart this month, and had been certified platinum by the RIAA thanks to a Sprint promotional campaign that delivered 1 million free copies of the album to those who entered a code provided by Sprint. 4:44 was released June 30, the final day of the most recent fiscal quarter, as a Sprint/Tidal streaming exclusive.
In its latest quarter, Sprint added 88,000 customers that pay a monthly bill, its most lucrative customers, versus 173,000 the year before. It gained prepaid customers compared with a loss the year before.
Overall, the company reported fiscal first-quarter net income of $206 million, or five cents per share. In the same period a year ago, it reported a net loss of $302 million, or eight cents per share.
The results beat Wall Street expectations for a loss of one cent per share, according to Zacks Investment Research.
Revenue rose about two percent to $8.16 billion, missing the $8.19 billion analysts expected, according to Zacks.
Shares of Sprint Corp. rose 82 cents, or 10 percent, to $8.80 in late morning trading.