Sprint Customer Base Climbs, Net Loss Widens

Sprint CEO Marcelo Claure on Monday said the company's turnaround plan is progressing well, despite reporting a hefty fiscal first-quarter net loss.

 

The U.S. telco generated revenue of US$8.01 billion (€7.3 billion) during the three months to 30 June, down slightly from $8.03 billion a year earlier. Adjusted EBITDA grew 18% year-on-year to $2.5 billion thanks to $550 million worth of cost savings.

 

However, operating income fell to $361 million from $501 million, mainly due to $113 million worth of one-off wholesale contract termination charges related to the merger earlier this year between two of Sprint's wholesale partners, Shenandoah Telecommunications (Shentel) and nTelos.

 

These charges drove Sprint's fiscal Q1 net loss wider to $302 million from $20 million in the same quarter a year ago.

 

Nonetheless, in operational terms, there were encouraging signs in Sprint's first-quarter performance.

 

The company ended June with 59.45 million subscribers, up from 56.81 million a year earlier. The results were driven by Q1 postpaid net additions of 180,000, and wholesale and affiliate additions of 528,00, which offset a decline of 331,000 in Sprint's prepaid base.

 

Postpaid churn held steady year-on-year at 1.56%, while prepaid churn increased to 5.55% from 5.08%. The churn rate of postpaid phone customers fell from 1.56% to a record low 1.39%.

 

"We had another quarter of solid progress in our turnaround with the highest first quarter postpaid phone additions in nine years, the lowest postpaid phone churn in company history, and finally being postpaid net port positive against all three national carriers (AT&T, Verizon and T-Mobile US) after five years," Claure said, in a statement.

 

Sprint reiterated its full-year guidance of operating profit of $1 billion-$1.5 billion and adjusted EBITDA of $9.5 billion-$10 billion. It expects capex to come in at around $3 billion.