Sprint is ready to consider deals but is in no hurry to make its choice

Sprint’s chairman said Wednesday that the company is ready to consider a merger, purchase or sale but is in no hurry to strike a deal.

Masayoshi Son’s comments came less than a week after a federal ban on strategic talks among telecommunications companies ended.

“We can be self-sufficient so we are not in a rush,” Son told analysts during a conference call after Overland Park-based Sprint released its year-end financial results and latest customer counts.

Son also is CEO and founder of Tokyo-based SoftBank Group Corp., which owns more than 80 percent of Sprint.

Analysts repeatedly asked for other information about Sprint’s interests — whether it would prefer merging with another wireless company or combining with a cable business — but were turned away.

“There are all kinds of possibilities and all kinds of opportunities,” Son said. “We are open to consider any optionality.”

Son did express hope that regulators in Washington would be more open to possible deals than they had been previously. Sprint dropped its efforts to seek a merger with T-Mobile in 2014 after federal officials made clear that they did not welcome the idea.

In its latest customer counts, Sprint reported adding high-value phone subscribers and month-to-month customers in the first three months of this year while trimming its financial losses compared with a year ago.

The company said its 187,000 new connections brought to 59.702 million the number of connections it had to its wireless network at the end of March.

Sprint’s phone customer gains were split between those who meet higher credit standards and are billed for service each month and pre-paid customers who have lower quality credit and pay month-to-month. Sprint had been shedding pre-paid customers.

CEO Marcelo Claure, in a separate call with reporters, said Sprint has decided to keep 360 of the 1,300 stores it shared with RadioShack, which is reorganizing in bankruptcy proceedings. The stores are being updated and will re-open as Sprint-owned stores by mid-July “at the latest,” Claure said.

Financially, Sprint posted a net loss of $283 million in January, February and March. The loss equaled 7 cents a share and was smaller than the $554 million loss, or 14 cents a share, in the same months of 2016.

For all of its fiscal year, Sprint lost $1.2 billion, or 30 cents a share, compared with nearly $2 billion, or 50 cents a share, a year earlier. Revenues for the year totaled $33.3 billion, up 3.6 percent.

“Sprint took a big step forward in the second year of our turnaround plan,” Claure said. “Net operating revenues returned to growth and cost reductions accelerated.”

Revenues in the quarter were 5.8 percent higher than a year ago at $8.54 billion, but a larger share of revenues were tied to phones and other equipment. Revenues generated from wireless services declined.

The company’s finances were helped by $2.1 billion in cost reductions throughout the company’s fiscal year, which brought to $3.4 billion the amount of cuts it has made in two years.

Management comments during the conference call disappointed some analysts, including Jennifer Fritzsche of Wells Fargo Securities, who has held steadily that Sprint’s shares would outperform the stock market generally.

Fritzsche’s note to clients said there were no signs of improvement in Sprint’s ability to generate more cash than it needs to operate so it can also cover network investments and pay off debts. She also was disappointed that Sprint did not set a target for how much it planned to cut its costs this year.

The company made a $1.76 billion operating profit for the year but slid to a loss after paying $2.5 billion in interest expenses and other costs.

Sprint said it expected to show an operating profit of between $2 billion and $2.5 billion in its new fiscal year, which began April 1.

This story was originally published May 3, 2017 at 7:22 AM with the headline "Sprint is ready to consider deals but is in no hurry to make its choice."