Sprint Corporation Just Swung to a Quarterly Profit for the First Time in Three Years

Sprint

Big day for Sprint shareholders! Before the bell on Tuesday, for the first time in three years, Sprint Corporation (NYSE:$S) swung to a quarterly profit. Not only that but the company’s chief executive said that an announcement on merger talks should come in the “near future”. As a result, shares increased more than 6%.

As we speak, Sprint, the number four wireless carrier in the United States, is exploring its options, including a merger with T-Mobile and a tie-up with Charter Communications (NASDAQ:$CHTR).

To top it off, the company is in the midst of carrying out a turnaround plan. The Overland Park, Kansas-based company is looking to strengthen its balance sheet in order to compete in a saturated market for wireless service.

Despite cutting costs, analysts still believe that Sprint is highly leveraged. Even though its customer base has expanded – thanks to Chief Executive Marcelo Claure – growth has been driven by discounting.

Let’s take a look at the numbers!

Sprint announced that it cut its costs of services and selling, general, and administrative expenses by roughly $370 million in the second quarter. Additionally, the company said it expects another $1.3 billion to $1.5 billion of year-over-year reductions in fiscal 2017.

Further, Sprint reported net income of $206 million (5 cents per share) in Q1, which ended on June 30. This is compared to a loss of $302 million (8 cents per share) in 2016. Net operating revenue hit $8.16 billion, which is up from $8.01 billion. On average, analysts had forecast a net loss of 1 cent per share on revenue of $8.11 billion, according to Thomson Reuters.

Last but not least, Sprint added 88,000 subscribers who pay a monthly phone bill in the second quarter. This is compared to 173,000 net additions in the 2016 period.

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About the author: Caroline Harris is a third-year student at Capilano University in North Vancouver, Canada. Having already completed an Associates Degree in Psychology, Caroline is now finishing her Bachelor's degree in Communications. In preparation for working in the advertisement sector, Caroline is writing financial content and analysis. On a daily basis, Caroline works on articles regarding the following topics: finance, cryptocurrency, technology, and politics.