Sprint Corp. reported net losses that were smaller than expected in the quarter ended June 30, but "structural headwinds" remain that make the company's pending merger with T-Mobile US Inc. the best outcome for all stakeholders, Sprint CEO Michel Combes said in an Aug. 2 statement.
An order to recommend approving T-Mobile's pending merger with Sprint is expected to be circulated soon. The U.S. Justice Department has already approval the deal. Both Sprint and T-Mobile have touted the deal as a key driver to speed the deployment of next-generation 5G wireless services.
Sprint has rolled out a mobile 5G service to portions of Atlanta; Chicago; Dallas-Fort Worth and Houston; and Kansas City, Kan.-Mo. The company said Aug. 2 that it expects to introduce the service in parts of Los Angeles, New York, Phoenix and Washington, D.C., in the coming weeks.
Sprint on Aug. 2 reported a net loss attributable to the company of $111 million, or 3 cents per share, for the quarter ended June 30, compared to attributable net income of $176 million, or 4 cents per share, a year earlier. The S&P Global Market Intelligence consensus estimate for the quarter was a loss of 4 cents per share on a GAAP basis.
The company reported operating income for the fiscal first quarter of $455 million, down from $815 million in the prior-year period. Adjusted EBITDA was $3.04 billion, compared to $3.28 billion a year ago.
Total net operating revenues for the fiscal first quarter hit $8.14 billion, compared to $8.13 billion in the year-ago quarter. Wireless revenue, which accounts for the majority of Sprint's business, recorded net operating revenues of $7.90 billion, compared to $7.85 billion a year earlier.
The company reported total wireless net losses of 175,000 for the just-ended period, compared to net additions of 57,000 a year earlier. Sprint gained a net 134,000 postpaid subscribers during the just-ended quarter but reported losses in other subscriber categories. It lost a net 169,000 prepaid subscribers and 140,000 wholesale and affiliate subscribers. Postpaid phone net losses were 128,000.
The company reported 54.3 million total connections as of June 30. That included 33.1 million postpaid connections, 26.5 million postpaid phone connections, 8.6 million prepaid connections, and 12.6 million wholesale and affiliate connections.
Average revenue per user was $42.57 for postpaid and $32.15 for prepaid, reflecting year-over-year declines in both categories.
Shares of Sprint were down in Aug. 2 premarket trading following the earnings release.