News Worms
News Worms


Sprint CEO Marcelo Claure's cost cutting strategy brings profit

Sprint CEO Marcelo Claure's cost cutting strategy brings profit

Doing so would combine Charter's more than 23 million landline broadband customers, and more than 17.1 million pay TV subscribers, with a wireless company looking for assets to compete with vertically integrated giants Verizon and AT&T. "The company delivered almost $370 million of combined year-over-year reductions in cost of services and SG&A expenses in the quarter, bringing the total reduction during the last nine quarters to almost $4 billion".

Financials: Total revenue of $8.16 billion edged past the $8.13 billion predicted by Wells Fargo Securities analysts, and while wireless service revenue was down 6.2% year over year to $5.72 billion, it beat Wells Fargo's estimate of $5.7 billion.

Sprint Corp. (S) shares surged in premarket trading on Tuesday, Aug. 1, after the company reported a profit for the first time in three years. The new announcement now means Sprint can resume its merger negotiations with rival telecommunications company T-Mobile.

"Sprint reached an important milestone this quarter by returning to profitability for the first time in three years", CEO Marcelo Claure said in a press release.

Most importantly, Sprint was able to gain 88,000 new postpaid additions during the quarter that ended on June 30th, 2017, the eight consecutive quarter of additions for the carrier. Next quarter's results will be the real test - is not even a free Sprint service appealing to customers?

Revenue rose about 2 percent to $8.16 billion, missing the $8.19 billion analysts expected, according to Zacks. Claure said that "we think in the near future, we should be able to strike a deal with one of the different players". However, the pace of growth has slowed from a year ago when the company reported 173,000 postpaid additions.

Sprint achieved almost $370 million of combined reductions in cost of services and SG&A expenses in the quarter, bringing the total reduction during the last nine quarters to almost $4 billion. After rallying more than 130% in 2016 in anticipation of a corporate turnaround, as of Monday afternoon Sprint stock was down just a bit year-to-date largely because evidence of that turnaround remained obscured.

"We observed last quarter that we've never in our careers encountered a company whose financial reports, on an as-reported basis, make it as hard to discern underlying trends (although, to be fair, the entire wireless sector is problematic on this score)", Craig Moffett of MoffettNathanson wrote in a note to investors.

Investors said a deal with Sprint would be negative for Charter bondholders as it would likely increase leverage significantly.

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