Sprint Corp. (S) swung to a third-quarter profit in its first
quarterly report since Japan's SoftBank Corp. (9984.TO) acquired a
majority stake in the company, as the cell-phone carrier reported a
large one-time gain from its investment in Clearwire Corp.
Over the summer, SoftBank completed a three-way merger with
Sprint and Clearwire, gaining control of both companies. The deal
provides a multibillion-dollar injection of cash for Sprint, giving
the Overland Park, Kan., company much-needed capital to expand its
high-speed wireless network.
Sprint has languished as a second-tier U.S. wireless carrier for
years, following its problematic $35 billion merger with Nextel in
2005 that saddled it with the costs of running two separate
networks, one of which it finally shut down completely a few months
ago. Now under SoftBank, Sprint needs to prove it's able to compete
in a wireless industry currently dominated by Verizon Wireless and
AT&T Inc. (T).
Sprint reported a profit of $383 million, compared with a
year-earlier loss of $767 million. The latest period included a
one-time $1.4 billion gain related to the write-up of Sprint's
previously held investment in Clearwire.
Revenue fell 0.9% to $8.68 billion.
Analysts polled by Thomson Reuters had most recently forecast
revenue of $8.81 billion.
The company lost 535,000 net contract subscribers in the latest
quarter, compared with losses of 1.05 million in the prior quarter
after it turned off the Nextel network in June and a loss of
456,000 a year earlier.
Earlier this month, Verizon Wireless reported 927,000 net
contract additions and AT&T reported 363,000.
The total contract customer turnover rate was 2.09%, compared
with 2.63% in the prior quarter and 2.09% a year ago.
Sprint sold nearly 1.4 million iPhones during the quarter with
40% going to new customers.
Shares closed Tuesday at $6.68.
Write to Ben Fox Rubin at ben.rubin@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires