Charter, Sprint and HSBC — CORPORATE REPORT

Big Telecom Earnings Recap Sprint Ticks Higher

Big Telecom Earnings Recap Sprint Ticks Higher

Sprint Corp. (S) shares surged in premarket trading on Tuesday, Aug. 1, after the company reported a profit for the first time in three years.

Debt-heavy Sprint has been trying to turn its business around, and CEO Marcelo Claure said on a call with analysts Tuesday that it could "sustain itself" alone. Sprint added 61,000 total customers for the quarter. "We have spoken to everybody and we have choices and when the time is right we going to strike a deal", he said.

After Charter rebuffed an overture over the weekend that would essentially have the No. 2 cable company buy SoftBank's No. 4 US wireless carrier, Sprint, Bloomberg said that Son will try to buy Charter outright and combine it with Sprint.

He did say he was surprised by some of the reports around a potential tie-up with Charter Communications Inc.

"Overall, our view is that Charter likely does not want to sell, but that SoftBank is one of the few companies that could put a bid in big enough to take control", analysts at JPMorgan Chase & Co., led by Philip Cusick, said in a note to investors.

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It is also in the middle of a turnaround plan and has sought to strengthen its balance sheet to compete in a saturated market for wireless service. Most Americans already have a cellphone, and carriers have been trying to lure them with discounts and the return this year of unlimited-data plans. Son tried to engineer a merger between the two back in 2013, after SoftBank's $21.6 billion acquisition of Sprint, and has recently resumed his pursuit. Yes, free. And yet it still lost 39,000 customers during the quarter that ended that month - a huge disappointment, as analysts were predicting a substantial gain instead.

The telecom company reported net income of $206 million and its highest Ebitda in almost 10 years of $2.9 billion in its fiscal first quarter. Net income was $206 million - or $0.05 per share - compared to a loss of $302 million - or $0.08 EPS a year ago.

The results beat Wall Street expectations for a loss of 1 cent per share, according to Zacks Investment Research. Revenue rose 2 percent to $8.16 billion.

Net operating revenues rose 1.8 percent to Dollars 8.157 billion, as higher equipment sales helped offset lower service revenues, and adjusted EBITDA increased 16.1 percent to USD 2.853 billion.

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