Sprint Reports Best Quarterly Earnings Performance in Seven Years
Sprint reported its best performance in seven years, with Q2 earnings of $23 million. The carrier also trimmed its customer losses, reporting a net loss of 220,000 customers in the quarter, down from 383,000 lost in the same period last year.
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Sprint and parent SoftBank are widely expected to launch their campaign to buy T-Mobile US before the end of the summer (CD July 22 p1). But CEO Dan Hesse and other Sprint officials did not get any questions from analysts Wednesday about the expected merger or about Sprint participation in upcoming FCC spectrum auctions. Industry officials tell us they expect Sprint to sit out the AWS-3 auction but to pursue low-band spectrum in the upcoming TV incentive auction. T-Mobile US is to announce Q2 results Thursday.
Kevin Smithen, an analyst at Macquarie in New York, asked Hesse about SoftBank’s recent hiring of Google’s Nikesh Arora (CD July 21 p17), who will oversee U.S. operations for the Japanese company. “I haven’t talked to Nikesh, since his new role has been announced,” Hesse said. “There is no reporting relationship, if you will, to SoftBank other than their designees to the Sprint board. To my knowledge, they have no plans to make any changes there."
Sprint’s revenue fell to $8.8 billion, from $8.9 billion in the same quarter last year (http://bit.ly/1lXAcNp). Hesse said on the call with analysts that the carrier has all but completed “the multiyear rip and replacement of our core voice and 3G platform” and customers nationwide have access to HD voice service.
Hesse predicted the carrier will see marked reductions in customer churn “as customers have more time to experience improved network performance.” Sprint usually sees increases in churn rates in Q3 over Q2, but this year expects a decline, Hesse said. He also said Sprint is examining several options for lower-cost service. While no decisions have been made, cutting prices should also help lower churn rates, he said. UBS said in a research report there were no surprises in Sprint’s earnings report, but said more pricing moves are likely.