Sprint Corp. posted a narrower net loss in the third-quarter. It reported more than 5 percent year-over-year growth in net operating revenues and the highest postpaid phone net additions in four years.
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The company also reported operating income of $311 million and Adjusted EBITDA of $2.5 billion, both improvements of more than $500 million year-over-year.
Looking ahead for fiscal year 2016, the company now expects Adjusted EBITDA of $9.7 billion to $10 billion, at the high end of its previous expectation of $9.5 billion to $10 billion.
The company now expects operating income of $1.4 billion to $1.7 billion, at the high end of its previous expectation of $1.2 billion to $1.7 billion.
For fiscal year 2016, the company now expects cash capital expenditures, excluding devices leased through indirect channels, of $2 billion to $2.3 billion. The company's previous expectation was less than $3 billion. The company continues to expect Adjusted free cash flow around break-even.
Net loss for the third quarter narrowed to $479 million, or $0.12 per share, from $836 million, or $0.21 per share, in the year-ago period.
Operating income was $311 million in the quarter compared to an operating loss of $197 million in the year-ago period.
Adjusted EBITDA was $2.5 billion in the quarter compared to $1.9 billion in the year-ago period.
Total net operating revenues for the quarter grew to $8.55 billion from $8.11 billion in the prior year.
As part of its ongoing cost reduction program, the company modified the terms of its vendor agreements associated with the service and repair program on January 1, 2017, which are expected to be accretive to Adjusted EBITDA by approximately $25 million to $50 million per quarter. Under the terms of the new agreements, the company will now only record the net margin and therefore expects the reduction to wireless service revenues of approximately $200 million per quarter to be more than offset by a greater reduction in cost of service expenses.
The company remains on track to achieve its goal of a sustainable reduction of $2 billion or more of run-rate operating expenses exiting fiscal year 2016 and has plans for further reductions in fiscal year 2017 and beyond.
Sprint said its focus on delivering the best value proposition in wireless resulted in 368,000 postpaid phone net additions in the quarter, its ninth consecutive quarter of year-over-year improvement.
Even in a highly competitive quarter with multiple promotional offers from its competitors, Sprint was able to add more postpaid phone customers than both Verizon and AT&T and report its highest postpaid phone net additions in four years.
The company also remained postpaid net port positive for the third quarter in a row and had its highest postpaid phone gross additions in four years.
Sprint's total net additions were 577,000 in the quarter, including postpaid net additions of 405,000, prepaid net losses of 501,000, and wholesale and affiliate net additions of 673,000. Total postpaid churn was 1.67 percent and postpaid phone churn was 1.57 percent in the quarter.
In addition, the company said it is in the process of refinancing its $3.3 billion unsecured revolving credit facility and expects to complete that process in the coming weeks. ■