Sprint today reported operating results for the first quarter of fiscal year 2017, including net income for the first time in three years at $206 million and the highest Adjusted EBITDA in nearly 10 years at $2.9 billion.
The company also reported net operating revenues of $8.2 billion, its fourth consecutive quarter of year-over-year growth, and 88,000 postpaid phone net additions, its eighth consecutive quarter of net additions.
Sprint continued to make progress on its multiyear plan to transform the way it does business and improve its cost structure. The company delivered nearly $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 nearly $4 billion.
The ongoing cost-reduction program contributed to a return to profitability this quarter, as the company reported net income for the first time in three years. Excluding the after-tax benefit of non-recurring items in the quarter, Sprint would have reported net income of more than $150 million, demonstrating the improved underlying trends of the business.
Sprint expects an additional $1.3 billion to $1.5 billion of year-over-year net reductions in cost of services and SG&A expenses in fiscal year 2017. Although the gross reductions are expected to be higher, the company plans to reinvest some of the savings into future growth initiatives.
The company also reported the following financial results:
|(Millions, except per share data)||Fiscal 1Q17||Fiscal 1Q16||Change|
|Net operating revenues||$8,157||$8,012||$145|
|Basic earnings/(loss) per share||$0.05||($0.08)||$0.13|
|Net cash provided by operating activities||$1,280||$542||$738|
|Adjusted free cash flow*||$239||$466||($227)|
Eight Straight Quarters of Postpaid Phone Customer Growth
Sprint’s focus on delivering the most attractive value proposition in wireless resulted in 88,000 postpaid phone net additions in the quarter, its eighth consecutive quarter of net additions. Postpaid phone gross additions also grew year-over-year for the sixth consecutive quarter and were the highest first-quarter result in five years.
The recent turnaround of Sprint’s prepaid business has been driven by its higher revenue-generating brands. Prepaid net additions of 35,000 were positive for the second consecutive quarter and contributed to sequential growth in prepaid service revenue for the first time in six quarters.
The company also reported the following results:
- Total net additions were 61,000 in the quarter, including postpaid net losses of 39,000, prepaid net additions of 35,000, and wholesale and affiliate net additions of 65,000.
- Postpaid phone churn was 1.50 percent and total postpaid churn was 1.65 percent.
Sprint Network Continues to Improve
Sprint is unlocking the value of the largest spectrum holdings in the U.S. by densifying and optimizing its network. The company has already deployed thousands of small cell solutions, including the recently announced Sprint Magic Box, the world’s first all-wireless small cell.
Network performance improvements have been validated by numerous third-party sources:
- RootMetrics® awarded Sprint more than 25 percent more first-place (outright or shared) Metropolitan area RootScore® Awards (from 166 to 211) for reliability, speed, data, call, text or overall network performance in the first half of 2017 compared to the year-ago testing period.1
- Sprint’s overall network reliability continues to perform within 1 percent of Verizon and AT&T, based on an analysis of Nielsen data.
- Sprint’s average download speeds have increased 20 percent in the last six months, according to Ookla’s Speedtest Intelligence data for all results from January through June 2017.