On Friday, Sprint reported operating results for the third quarter of fiscal year 2017, including its highest retail net additions in nearly three years, with postpaid net additions of 256,000 and prepaid net additions of 63,000. The company also reported its eighth consecutive quarter of operating income and the highest fiscal third quarter adjusted EBITDA in 11 years.
“This momentum, along with a continued focus on the cost structure, is driving improvements in profitability metrics and adjusted free cash flow,” said Sprint CEO Marcelo Claure.
Sprint said it is “unlocking the value of the largest mobile broadband spectrum holdings in the U.S. and its Next-Gen Network is designed to drive significant improvements to network performance and the customer experience by investing in four main areas,”
Market analysts had differing reactions to the presentation:
“Sprint posted +184k postpaid phone adds, which is substantially better than many feared (or hoped for) after the other three carriers all reported better than expected results,” said Jonathan Chaplin, Analyst of New Street Research. “Some had come to expect a decline in postpaid phones. Furthermore, ARPU, churn and EBITDA were all solid; it doesn’t seem like they overpaid for sub growth (unlike AT&T). Guidance was solid too. We would expect the stock to recover some of its losses from a tough start to the year.”
“Sprint’s stretch of unsustainability dates all the way back to the merger with Nextel in 2005,” said Craig Moffett of MoffettNathanson. “Twelve years later, they have endured falling subscribership, declining ARPU, falling revenues, soaring debt, wildly unprofitable promotions, repeated management changes, failed merger attempts (or at least flirtations), and seemingly perpetual under-investment in their network. Through it all, and against all odds, they have “sustained.” But little more.”
February 5, 2018