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U.S. operator raises full-year outlook as fiscal Q2 net loss narrows.
Sprint on Tuesday raised its full-year outlook after reporting a year-on-year increase in fiscal second quarter revenue for the first time in two years.
In the three months to 30 September, the U.S telco generated revenue of $8.25 billion (€7.5 billion), compared to $7.98 billion a year earlier. Service revenue fell to $6.41 billion from $6.88 billion, but equipment revenue grew to $1.83 billion from $1.10 billion.
Sprint also swung to an operating profit of $622 million, compared to a year-earlier loss of $2 million, as the company reduced service, selling, general and administrative expenses by $600 million during the quarter.
The growth in revenue and significant reduction in expenses helped Sprint to narrow its quarterly net loss to $142 million from $585 million a year ago.
"We took another step forward in our plan toward sustainable profitability and cash generation with this quarter’s results," said Sprint CEO Marcelo Claure, in a statement. "The top line is now growing, we continue to take costs out of the business, and we are successfully raising money at materially lower rates to reduce our future cash interest expenses."
Indeed, the company earlier in October carried out yet another sale and leaseback deal, this time using a portion of its spectrum as collateral for notes worth $3.5 billion.
The notes carry an interest rate of 3.36%, which is less than half of the company’s current effective interest rate, Sprint said on Tuesday.
"This transaction represents the latest example of Sprint’s strategy to diversify its sources of financing, lower its cost of capital, and reduce future interest expenses," the Softbank-owned telco said.
As disclosed last week, Sprint added 744,000 customers during the quarter, including 344,000 postpaid, and 823,000 wholesale and affiliate subscribers, comfortably offsetting a loss of 427,000 prepaid customers.
The company ended September with 60.19 million customers in total, up from 57.87 million at the end of September 2015.
The encouraging performance prompted Sprint to raise its full-year operating income guidance to $1.2 billion-$1.7 billion, from its previous range of $1 billion-$1.5 billion. Sprint also expects cash capital expenditures to come in below $3 billion, as the company now has better visibility into the timing of payments related to its network densification programme.
