Sprint's revenue beats estimates as it adds subscribers

A construction project manager for Sprint Corp., closes the door of a control cabinet at a cell site utilizing 8T8R equipment, the multiple antenna technology which combines eight-transmit and eight-receive radios at a cell site to boost the performance of Sprint's LTE TDD 2.5 GHz
Daniel Acker | Bloomberg | Getty Images
A construction project manager for Sprint Corp., closes the door of a control cabinet at a cell site utilizing 8T8R equipment, the multiple antenna technology which combines eight-transmit and eight-receive radios at a cell site to boost the performance of Sprint's LTE TDD 2.5 GHz

Sprint, reported better-than-expected first-quarter revenue on Monday as big discounts helped it attract more postpaid subscribers, and the No. 4 U.S. wireless carrier said it had enough money to fund its business this year.

Analysts and investors had raised questions about Sprint's financial position after majority owner SoftBank agreed earlier this month to buy UK chipmaker ARM for $32 billion.

"We expect that we will have adequate sources to provide all the capital necessary to fund the business and repay the debt maturities due in FY 16," Chief Financial Officer Tarek Robbiati said on a conference call with analysts.

Sprint, whose shares rose more than 18 percent in early trading, reported 173,000 postpaid wireless additions in the three months ended June 30 — the biggest increase for any first quarter in nine years.

That compared with a net loss of 12,000 subscribers in the same period last year.

The quarter also had the lowest postpaid phone churn in the company's history, Chief Executive Marcelo Claure said in a statement. Postpaid phone user churn, or the rate at which subscribers defect to other networks, was 1.39 percent.

"We believe the turnaround story is taking shape," Wells Fargo analyst Jennifer Fritzsche said in a client note.

However, the company's net loss widened to $302 million, or 8 cents per share, in the period from $20 million, or 1 cent per share, a year earlier.

The latest quarter included contract termination charges of $113 million, primarily related to an agreement with wireless carrier Ntelos.

Sprint, in which Japan's SoftBank holds a more than 80 percent stake, said its net operating revenue fell marginally to $8.01 billion. Analysts on average had expected $7.98 billion, according to Thomson Reuters I/B/E/S.

Up to Friday's close of $4.62, Sprint's shares had risen 27.6 percent since the start of the year.