By Malathi Nayak and Kshitiz Goliya
(Reuters) - Sprint Corp,
the No. 4 U.S. wireless carrier, on Tuesday reported a
smaller-than-expected quarterly loss, helped by cost-cutting measures
and subscriber additions amid its turnaround efforts.
Shares of
the company, which have fallen about 21 percent in 2016 through Monday,
jumped 11.3 percent on Tuesday in premarket trading to $2.84.
Sprint,
which is majority owned by Japan's SoftBank Group Corp, also said it
expects to return to a profit on an operational basis for the full-year
ending March.
Sprint added 501,000 net postpaid connections,
compared with 30,000 a year earlier. Customer sign-ups, which increased
for the second straight quarter after two years of declines, were driven
by aggressive promotions.
"There is no question that Sprint's
management team is finally showing real urgency in taking necessary
measures to stop the bleeding," MoffettNathanson analyst Craig Moffett
said.
The Overland Park, Kansas-based company has managed to
reverse its subscriber losses and launched aggressive promotions to lure
customers such as 50 percent discounts to users of its rival networks Verizon Communications Inc (N:VZ), AT&T Inc (N:T) and T-Mobile US Inc.
Investors
have been concerned about whether the company with high leverage can
balance its turnaround efforts through cost cuts alongside investments
to acquire users and upgrade its network.
The company, which had
been burning cash at a fast rate in recent months, reported cash and
cash equivalents of $2.2 billion for the third quarter ended Dec. 31, up
from $2 billion in the second quarter.
Excluding items, the company lost 21 cents per share, beating the average analyst estimate of a net loss of 25 cents per share.
Sprint
posted a net loss of $836 million, or 21 cents per share, in the third
quarter ended Dec. 31, compared with a loss of $2.38 billion, or 60
cents per share, a year earlier.
Sprint's net operating revenue fell 9.7 percent to $8.11 billion, below the average analyst estimate of $8.23 billion.
For
the full year, Sprint said raised its adjusted EBITDA forecast to $7.7
billion-$8 billion from its previous outlook of $6.8 billion to $7.1
billion. It said it also expects an operating income of $100
million-$300 million, compared with its previous forecast of a loss of
$50 million-$250 million.
