Timeline: Sprint’s merger with T-Mobile
Sprint reported its first annual profit in 11 years on Wednesday and named a new CEO as it plunges into a merger with rival T-Mobile.
Marcelo Claure, who became CEO in August 2014, is becoming the company's executive chairman. He will succeed Sprint chairman Masayoshi Son, who is CEO of the Tokyo-based SoftBank Group that owns Sprint.
Replacing Claure, Sprint named Michel Combes as its chief executive officer. Combes recently joined Sprint from Altice. He has been president and chief financial officer at Sprint. The changes will become effective by the end of May.
"I'm not leaving," Claure told analysts during a conference call after announcing the earnings and management changes.
He said the shift will free him to campaign with T-Mobile CEO John Legere as the companies work to win federal approval of their proposed merger.
"We have to get this deal approved," Claure told reporters Wednesday after the earnings report and news of his new focus. "That's where I can generate the most value for shareholders."
A year into his post at Sprint, Claure had told The Star that the outcome of his time at Sprint would become his legacy though he already had built Brightstar, a Miami-based cellphone business with $10 billion in annual sales.
"People will never remember the story of Marcelo at Brightstar, which, it was a pretty cool story," he had said of himself. "What people will remember is Marcelo’s passage at Sprint."
On Wednesday, he pointed to the company's first profit in 11 years, its financial stability and the merger with T-Mobile that both companies say will create thousands of jobs.
Claure and Legere already have visited the Federal Communications Commission and the U.S. Department of Justice, each of which will review the merger plan.
In Claure's job shift, he also will become chief operating officer of SoftBank Group Corp. that owns Sprint and chief executive officer of SoftBank Group International. In the SoftBank posts, Claure will oversee Sprint.
Claure said Combes, as Sprint's new CEO, will focus on running the company and advancing its network toward 5G technology as though no merger is planned.
The profit of $7.4 billion covered the Overland Park-based wireless company's fiscal year that ended March 31. Sprint said it would have made a profit even without the $7.2 billion profit it recorded in its third quarter thanks to President Donald Trump's corporate tax reforms.
Sprint said it added a relatively scant 44,000 new subscribers in January, February and March, giving it 54.625 million subscribers. The total is up from 53.6 million a year ago. The recent gains included high-revenue phone subscribers and pre-paid phone customers but a decline in connections through wholesalers and affiliates.
T-Mobile had said Tuesday that its customer count grew to 74 million subscribers at the end of March.
The wireless rivals have agreed to a merger that would pay Sprint shareholders with shares of T-Mobile. Federal officials will review the proposed merger but have previously blocked similar plans to combine any of the nation's four wireless carriers.
Sprint's agreement to merge with T-Mobile throws into question the nearly 6,000 jobs Sprint has at its Overland Park headquarters campus. The company already had announced 500 job cuts there before the agreement with T-Mobile.
The annual profit at Sprint comes in large part by its long efforts to cut costs, which continue.
Sprint said its revenues in the fourth quarter of its fiscal year totaled $8.08 billion, down from $8.54 billion a year earlier. Revenues for all of its fiscal year were $32.4 billion.
The annual profit included a $69 million profit in January, February and March.