Sprint reports financial and subscriber gains a week ahead of schedule

Sprint reports higher revenues and subscriber counts a week ahead of its scheduled official third-quarter earnings report.
Sprint reports higher revenues and subscriber counts a week ahead of its scheduled official third-quarter earnings report.

Sprint Corp., feeling good about its recent operating results, released unaudited third quarter results Tuesday morning albeit with caveats that final totals could be different.

The Overland Park-based wireless carrier said it added 740,000 subscribers during July, August and September, including 344,000 in its higher-revenue customer counts.

Financially, the company boosted revenues by 3 percent to $8.25 billion with its dominant wireless business growing revenues by nearly 5 percent from a year ago.

“This is a HUGE deal,” analyst Jennifer Fritzsche of Wells Fargo Securities wrote of the preliminary results in a morning note to clients. “Sprint obviously is gaining operational momentum in terms of sub(scriber) growth.”

Fritzsche noted that Sprint’s revenue had increased only once in the previous two years.

Company executives had focused recently on stabilizing revenues while cutting billions of dollars in costs in a bid to improve financial results. Sprint also has competed heavily for subscribers, along with its rivals, amid the launch of Apple’s iPhone 7 models.

Sprint shares fell more than 3 percent in late morning trading, down 22 cents at $6.70.

Investors seemed to share a less rosy view of Sprint’s report as provided by analyst Craig Moffett at MoffettNathanson Research. He noted that “things are getting better,” but Sprint continued to battle on several fronts.

Network investments and other capital spending was “exceedingly low” and may make it difficult for Sprint to meet its targeted capital spending target for the year, Moffett said.

Sprint also continued to lose lower-revenue pre-paid customers, who buy wireless service month to month, enough that total phone subscriber totals fell during the quarter, Moffett wrote in a note to clients. The phone customer gains it did make came through massive discounting, it said.

Sprint said it lost $142 million in the third quarter, compared with a loss of $585 million in the same months of 2015. Operations profited by $622 million, though the operating profit total ignores some costs such as paying interest on debt.

In a filing with the Securities and Exchange Commission, Sprint included additional preliminary results for the quarter but did not indicate why it made the early report. Final, audited earnings are scheduled for release next Tuesday.

Fritzsche, in her note, said she assumed Sprint updated investors because the company currently is in the process of selling bonds to raise $3.5 billion. Sprint announced the bond sale last week but said it was being offered in a private placement.

Mark Davis: 816-234-4372, @mdkcstar