On the eve of Marcelo Claure’s first anniversary as the CEO of Sprint Corp., the Overland Park, Kan.-based telecom company on Tuesday reported a quarterly loss of $20 million, or 1 cent per share. That was down from a profit of $23 million, or 1 cent per share, in the first quarter last year, but it was better than the loss of 7 cents per share projected by analysts polled by the Wall Street Journal.
Sprint reported it had 56.8 million subscribers at the close of the three months ended June 30, meaning the company has fallen behind rival T-Mobile’s 58.9 million subscribers and now ranks as the No. 4 U.S. wireless company by subscriber count.
Even so, SoftBank chairman and CEO Masayoshi Son said in a conference call Tuesday that he is “extremely excited about the turnaround of Sprint.” Son, whose Tokyo-based company owns a controlling interest in Sprint, pointed to Claure, who succeeded Dan Hesse as chief executive last Aug. 6, as a big reason for that optimism.
For the first quarter, Sprint reported a decline in revenue, to $8 billion from $8.8 billion last year. Earnings before interest, taxes, depreciation and amortization increased to $2.1 billion, a 14 percent spike. Despite additional costs resulting from a higher volume of retail sales, the company’s expenses for the quarter were lower.
Sprint raised its outlook for EBITDA in fiscal 2015 to between $7.2 and $7.6 billion, a 10 percent increase from previous estimates, due to factors including “improved customer trends” and a reduction in operating expenses.
Son said Tuesday that when SoftBank bought Sprint in 2013, it was planning on consolidation in the U.S. market. Indeed, Sprint courted T-Mobile for months, but last August the company ended its pursuit amid disagreements between the companies and pressure from antitrust regulators. When the T-Mobile deal fizzled, Son said, he lost confidence.
But the SoftBank chief said he has regained faith in Sprint and does not have any plans to sell it. Instead, Son said, he and Claure are engineering a turnaround plan for the company.
“I am extremely excited about that and I have a confidence for that,” he said, “especially with a new leader, Marcelo, which I have full confidence.”
Son confirmed SoftBank’s willingness to finance further upgrades to Sprint’s network, which he said make him especially positive about the company’s potential.
Also Tuesday, Sprint announced Tarek Robbiati will become its new chief financial officer, replacing Joseph Euteneuer. Robbiati faces the challenge of reversing the financial fortunes of a company that has reported a net loss in five of the past six quarters. Robbiati most recently led FlexiGroup, an Australian consumer finance company specializing in leasing.
Sprint and partners are setting up a leasing company that will finance devices leased by customers.