Sprint shares rise on first quarter

Robyn Ryan
August 2, 2017

Read between the lines of Sprint Corp.'s quarterly results statement, and it says, "Please buy us".

It is also in the middle of a turnaround plan and has sought to strengthen its balance sheet to compete in a saturated market for wireless service. SoftBank has achieved sizable girth through highly leveraged financing of acquisitions like Alibaba Group Holding Ltd., for which it has achieved outsized returns, and Sprint, on which it has lost billions.

The announcement about Charter turning down Sprint adds on to the tension existing in the media, cable and telecommunications industries. Claure said that "we think in the near future, we should be able to strike a deal with one of the different players".

Charter Communications Inc's shares surged to a record high on Monday after a source said Japan's SoftBank Group Corp was considering an acquisition offer, even as Charter shot down the possibility of it being the acquirer in any merger with SoftBank's USA wireless carrier, Sprint Corp.

He did say he was surprised by some of the reports around a potential tie-up with Charter Communications Inc.

Combining No. 3 T-Mobile and fourth-place Sprint would create an entity large enough to challenge the duopoly of Verizon Communications and AT&T.

While seemingly everyone in the world is waiting for Sprint CEO Marcello Claure to make a deal, the boss is still also focused on fixing the wireless carrier's own business. "Everybody has shown a high level of interest in evaluating Sprint as a potential merger partner".

The company noted that the quarterly profit was a result of thousands of job cuts past year, which cut $4 billion from operating costs.

What Claure didn't discuss was the slight decrease in the company's total liabilities. Although free cash flow was down $392 million versus an increase of $1.14 billion in the first quarter of 2017, that's only because Sprint culled its debt issuance by $2.3 billion year-over-year, retiring more than it issued in the recently completed quarter.

Net income came in at $206 million, marking a significant improvement over the $302 million it posted during the same period a year ago. Revenue dropped 4.5% to $8.16 billion.

Sprint increased cash capital expenditures to Dollars 1.6 billion in the quarter compared to USD 878 million a year ago.

Aggressive new promotions to court new subscribers led to 61,000 new connections during the quarter, Sprint said, including 88,000 new post-paid subscribers - it's most lucrative segment.

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