News
But U.S. telco widens fiscal fourth-quarter loss as revenue declines, costs edge up.
Sprint swung to its first full-year operating profit in nine years, but its fiscal fourth-quarter performance showed there is still a long road to recovery.
Postpaid net additions fell sharply to 56,000 in the three months to 31 March, from 211,000 in the year-ago quarter. Prepaid customers fell by 264,000. However, the addition of 655,000 wholesale and affiliate customers meant Sprint ended the quarter with 58.81 million subscribers, up from 58.36 million in the previous quarter and 56.14 million a year earlier.
Sprint’s quarterly revenue fell 2.75% year-on-year to US$8.07 billion, while operating income fell to $8 million from $318 million a year earlier, due to higher costs stemming from the shutdown of its legacy WiMAX network.
These costs caused Sprint’s net loss to widen to $554 million from $224 million.
For the full year, Sprint’s revenue fell to $32.18 billion from $34.53 billion. However, lower costs and the absence of a $2.13 billion impairment charge meant its operating earnings swung into the black for the first time in nine years, generating a profit of $310 million, compared to a year-earlier loss of $1.9 billion.
Adjusted EBITDA increased to $8.15 billion from $6 billion, while Sprint’s full-year net loss narrowed to just under $2 billion from $3.35 billion.
"We generated positive operating income in fiscal 2015 for the first time in nine years, driven by consistent quarterly operating revenues and continued momentum in our cost reduction efforts with a $1.3 billion improvement year-over-year in cost of services and selling, general and administrative expenses," said Sprint CEO Marcelo Claure, during the operator’s results call.
"Now we’re focusing on delivering even more expense reductions in fiscal 2016 to further improve the profitability and cash flow of the business," he said.
Indeed, Sprint aims to cut costs by $2 billion by the end of its fiscal 2016.
Looking ahead to the next 12 months, Sprint expects adjusted EBITDA in the range of $9.5 billion-$10 billion, and operating income of $1 billion-$1.5 billion.
