3 Min Read
(Reuters) - Sprint Corp on Tuesday reported a wider quarterly loss and added fewer subscribers than expected, but vowed to cut more than $2 billion in costs in the current fiscal year to stop the red ink. Sprint shares, which had fallen about 4 percent so far this year, jumped as much as 5.7 percent on Tuesday before easing, up 1 percent at $3.53.
Net operating revenue fell to $8.07 billion in the fourth quarter from $8.28 billion a year earlier.
Sprint's net loss widened to $554 million, or 14 cents per share, from $224 million, or 6 cents per share, and fell short of the average analyst estimate of a net loss of 12 cents per share, according to Thomson Reuters I/B/E/S.
Sprint has been offering customers half-off discounts to switch from rival networks.
"There's been a lot of talk (about) whether we're being irresponsible bringing in customers at 50 percent off," Chief Executive Officer Marcelo Claure said on an earnings conference call. "That's absolutely not the case."
Sprint aims to reduce costs by over $2 billion by slashing jobs and expenses by the end of fiscal year 2016 in an attempt to reverse years of customer defections and losses.
The No. 4 U.S. wireless carrier said it shed $1.3 billion in costs in fiscal year 2015.
Claure said Sprint was committed in the fiscal year to cutting costs in such areas as sales and marketing, customer care and information technology.
No "massive layoffs" were expected in the year, executives said on a media call. Sprint cut at least 2,500 jobs in January, it said.
The company has been making network upgrades to compete with bigger rivals Verizon Communications Inc, AT&T Inc and T-Mobile US Inc.
Overland Park, Kansas-based Sprint added 56,000 monthly subscribers in the fourth quarter ended March 31, trailing the average analyst estimate of 220,300 customers, according to research firm FactSet StreetAccount.
Sprint, majority-owned by Japan's SoftBank Group Corp, forecast operating income for the year ending March 2017 to be $1 billion to $1.5 billion, versus the $310 million it posted for the year ended March 31.
The company also stuck to its forecast of about $9.5 billion to $10 billion in adjusted earnings before interest, taxes, depreciation and amortization for the year.
Sprint has signed deals in recent months for the sale and leaseback of certain network assets with SoftBank to raise cash. Last week, it announced a $2 billion bridge financing arrangement with Mizuho Bank.
The company's total current liabilities stood at $11.96 billion, while total current assets were $6.83 billion as of March 31.
Reporting by Malathi Nayak in New York and Sai Sachin R in Bengaluru; Editing by Don Sebastian and Jeffrey Benkoe