Sprint Corporation (NYSE: S) reported operating results for the second quarter of fiscal year 2017, including its highest share of postpaid phone gross additions in company history and its third consecutive quarter of net additions in both postpaid phones and prepaid with 279,000 and 95,000 net additions, respectively. The company also reported operating income of $601 million and its highest fiscal second quarter adjusted EBITDA in 10 years at $2.7 billion.
Amir Rozwadowski of Barclays said Sprint’s decision to mimic T-Mobile’s “no call” strategy this quarter all but ensured that the company’s results would likely be viewed through the lens of how they would help its positioning during any potential negotiations. “On balance, the carrier’s broadly in-line to slightly better results for the quarter rode the recent wireless industry wave of tempered activity levels and seems to be enough to improve its perceived positioning for any pending deal talks,” Rozwadowski said. “We fine-tune our estimates and keep an eye out for any data points which signal the announcement of this long anticipated transaction.”
Net cash provided by operating activities of $2 billion improved by $251 million per quarter year-over-year, bringing the year-to-date total to $3.2 billion, an improvement of $1 billion, compared to a year ago. Adjusted free cash flow was $420 million in the quarter, bringing the year-to-date total to more than $650 million. The company now expects adjusted free cash flow for fiscal year 2017 to be around break-even.
“Sprint was able to deliver net additions in both its postpaid phone and prepaid business for the third consecutive quarter,” said Sprint CEO Marcelo Claure. “I’m even more proud that the team was able to deliver this customer growth while continuing to attack the cost structure, improve the network, and maintain positive adjusted free cash flow.”
Highlights
- The company continues to expect adjusted EBITDA of $10.8 billion to $11.2 billion.
- The company continues to expect operating income of $2.1 billion to $2.5 billion.
- The company continues to expect cash capital expenditures, excluding devices leased through indirect channels, of $3.5 billion to $4 billion.
- The company expects adjusted free cash flow to be around break-even.
October 26, 2017
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