Sprint Corp posted third-quarter revenue that beat estimates while the U.S. wireless carrier lost fewer customers than expected even as it cut back on price promotions to improve financials.
The company posted a net loss of 3 cents a share versus a net profit last year when it benefited from a U.S. tax cut. Analysts had expected a loss of just 2 cents a share.
Chief Executive Officer Michel Combes told analysts during the earnings call that Sprint must complete its merger with T-Mobile US Inc to effectively compete against larger rivals Verizon and AT&T. At the same time, it has pursued a plan to pull back on expensive price promotions to stabilize the business, which has struggled with negative perceptions of network quality.
Shares of Sprint, the No. 4 carrier with over 54 million total customers, were up 1.66 percent at $6.14 in morning trading.
Sprint lost a net 26,000 so-called “postpaid” phone subscribers who pay a recurring bill during the third quarter ended Dec. 31, fewer than the 32,000 subscriber losses analysts had expected, according to research firm FactSet.
Total net operating revenue rose 4.4 percent to $8.60 billion, beating forecasts by analysts who had expected revenue of $8.43 billion.
The company has focused on promoting data plans for devices like tablets and smartwatches, which helps customers stick with the carrier longer if they have more devices on the network.
Sprint reported a net loss of $141 million, or 3 cents per share, in the quarter, compared with a net income of $7.16 billion, or $1.76 per share, a year earlier, when the company benefited from a change in U.S. tax laws.
Analysts were expecting the company to report a loss of 2 cents per share, according to IBES data from Refinitiv.
In July, Sprint revamped its unlimited wireless plans to include more perks at higher prices, in order to make more money from customers on the plans.
But the company warned churn, or the rate of customer defections could rise in the near-term due to the higher prices. Churn for the third quarter increased to 1.84 percent, up from 1.71 percent last year.
Sprint said it continues to expect cash capital expenditures between $5 billion to $5.5 billion.―Reuters