Sprint reported results for its fiscal third quarter to end December, saying retail net additions reached its highest level in nearly three years. The company also said it raised its guidance for operating profit and adjusted free cash flow. Revenues came under some pressure on lower ARPU.
The company reported a net profit of USD 7.162 billion, against a loss of 479 million the year before, helped by a USD 7.1 billion non-cash benefit from the recent US tax reform rules. The operating profit rose to USD 727 million from 311 million, while the adjusted EBITDA lifted to USD 2.719 billion from 2.450 billion. The adjusted free cash flow went higher to USD 397 million from a negative 646 million year-on-year. Revenues slipped to USD 8.239 billion from 8.549 billion, pulled down by declines at postpaid, with net operating revenue here going lower to USD 4.297 billion from 4.686 billion. At prepaid, the net operting revenue went up slightly to USD 993 million from 985 million while at wholesale and affiliate, they rose to USD 329 million from 275 million.
Net additions for the quarter reached 385,000, up from 378,000 in fiscal Q2 and 564,000 the year before. The increase included 256,000 postpaid subscribers –including 184,000 phone net additions- and 63,000 prepaid net additions. Wholesale and affiliate additions went to 66,000. Sprint ended the quarter with total 54.581 million connections. ARPU went lower both sequentially and annually for postpaid and prepaid, to USD 45.13 and USD 37.46, respectively. Churn increased for postpaid to 1.80 percent, from 1.72 percent in fiscal Q2 and 1.67 percent the year earlier. For prepaid, the percentage went to 4.63 percent, down from the 4.83 percent recorded in the previous quarter and 4.74 percent the year before.
Looking ahead, the company raised its fiscal full year 2017 forecast for operating profit to USD 2.5-2.7 billion, from its previous expectation of USD 2.1-2.5 billion. Adjusted EBITDA is now seen at the mid-point of its previous guidance of USD 10.8-11.2 billion. Cash capex, excluding devices leased through indirect channels, will be at the low end of its previous forecast of USD 2.5-4 billion. Free cash flow meanwhile is now seen at USD 500-700 million, from its previous breakeven expectation.
Sprint said it continued to make progress on its cost reduction plan. Excluding USD 100 million in hurricane-related and other one-off charges, the company said it reduced certain year-on-year costs and expenses by USD 260 million, bringing year to date reductions to over USD 1 billion.
