Sprint swings to profit of $383M but loses customers
The nation's third-largest wireless carrier reports its first results following the completion of the SoftBank deal. It sold 1.4 million iPhones in the period.
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Sprint swung to a third-quarter profit its first period under new ownership.
The company, which reports for the first time after the completion of the SoftBank takeover and Clearwire acquisition, posted a net profit of $383 million, compared with a year-earlier loss of $767 million. No per-share earnings/loss were provided because the new combined SoftBank/Sprint stock was issued part way through the quarter.
It posted an operating loss of $398 million, compared with $231 million a year ago.
The company's net operating revenue fell 2 percent to $8.68 billion.
Sprint is expected to get a shot in the arm from Japanese carrier SoftBank, which is infusing the company with cash and expertise in exchange for taking a majority stake. Under SoftBank's guidance, Sprint is expected to get more aggressive.
But as the nation's third-largest carrier by subscriber, Sprint finds itself in a bind. The company can't compete with the reach and resources of larger Verizon Wireless and AT&T, which are locking up the high-end, premium customers. But on the low end, T-Mobile has gotten more aggressive with one promotional offer after another and now boasts an LTE network that covers more areas than Sprint.
Sprint reported a net loss of 313,000 customers, which includes a troubling net loss of 360,000 Sprint contract customers, offset by gains from its wholesale and prepaid business. It continued to post losses on the Nextel side after shutting down the network at the end of last quarter. It ended the period with 54.8 million customers.
The customer turnover rate among Sprint contract customers rose from 1.88 a year ago to 1.99 percent. The average revenue per user, however, did inch up 4 cents from a year ago to $64.28.
Sprint, meanwhile, bet big with its deal to carry the iPhone, but that hasn't turned out to be a real advantage with virtually every carrier big and small offering Apple's marquee smartphone.
Sprint said it sold 1.4 million iPhones in the period, 40 percent of which were sold to customers new to the carrier. In total, it sold 5 million smartphones.
Verizon Wireless said it sold roughly 3.9 million iPhones in the period, while AT&T stopped disclosing the number.
Sprint said yesterday that it added 45 new markets to its LTE map, bringing its total to 230 and finally covering all of New York City. T-Mobile earlier this month said it has covered 233 million markets.