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Sprint simplifies wireless business, posts first quarterly profit in three years – USA TODAY

Sprint simplifies wireless business, posts first quarterly profit in three years – USA TODAY

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Charter Communications Inc. isn’t interested in Sprint Corp.’s proposal, the company said in a statement to the Wall Street Journal Sunday.
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Sprint’s cost-cutting efforts have resulted in the wireless provider reporting its first quarterly profit in three years.

The Overland Park, Kan.-based telecom company posted net income of $206 million, beating the net loss of $49.35 million expected by analysts polled by S&P Global Market Intelligence.

Sprint CEO and President Marcelo Claure said the carrier delivered its best financial performance in more than a decade by cutting costs and improving its network. 

“We are coming from behind (in) this turnaround. We had many different areas we had to fix,” Claure said during a conference call discussing the financials. “The network continues to get better …  (and) we are making steady progress in terms of providing a much better experience for our customers.”

Simpler plans have satisfied customers and lowered turnover, he said. At one point, Sprint offered more than 1,700 different rate plans, Claure said. “Our customers were confused,” he said. “We embarked on a major simplification of the experience where there is only one way to buy a phone, which is Sprint Flex, and pretty much only buy one rate plan, which is unlimited.”

Sprint said it added 88,000 postpaid phone customers during the quarter, marking its eighth consecutive quarter of growth. And the company has already added more than 100,000 postpaid customers in July, Claure said.

Sprint, the No. 4 wireless carrier, ended the first quarter with 53.7 million wireless subscribers, up from 53.4 million in the same period a year ago. 

The competition added subscribers, too. AT&T added 2.3 million U.S. wireless customers during the quarter, growing to 135.7 million customers. Verizon added 614,000  growing to 114.5 million customers. T-Mobile added 1.3 million, ending the period at 69.6 million. 

The nation’s No. 2 cable and internet provider, Charter Communications, late Sunday said it was not interested in acquiring Sprint. The companies had been in discussions about Charter perhaps reselling Sprint’s wireless services, a deal the wireless industry refers to as a Mobile Virtual Network Operator, or MVNO.

Claure said that statement surprised him because “to be clear, Sprint were never offered to Charter to buy. It was part of a bigger play that has been reported.”

Masayoshi Son, who is the founder and CEO of the Tokyo-based telecom and Internet company Softbank, which controls Sprint, has been seeking a merger of Charter and Sprint. Son may consider making an offer to acquire Charter, according to Reuters, which cited a person familiar with the matter.

“We are having discussions with everybody,” Claure said. “We have plenty of options and we have had discussions with a lot of different parties, obviously companies that are in the same industry as we are and companies that are not. i think an announcement will be coming in the near future.”

Sprint (S) shares closed Tuesday up 11% to $8.86, and have risen more than 30% over the last 12 months.

Angelo Zino, equity analyst at CFRA Research equity analyst increased his target price for Sprint stock to $10 in a note to investors Tuesday. “We are encouraged by (Sprint’s) return to profitability, reflecting aggressive cost cutting efforts, and postpaid phone net additions … amid a tough industry landscape,” he said. “We like (the company) as a potential beneficiary of consolidation in the space and expect it to be a share taker.”

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Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.

 

 

 

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