Sprint beat rivals Verizon and AT&T in terms of postpaid subscriber net additions and surpassed revenue expectations, but failed to meet earnings per share expectations in its fiscal third quarter.
The carrier on Tuesday morning posted revenue of $8.5 billion and a net loss of $79 million, or 12 cents per share, for the three-month period ending in December. Those figures surpassed Wall Street’s revenue estimates by $240 million, but missed EPS consensus forecasts by four cents.
Sprint touted its addition of 368,000 postpaid phone subscribers, which beat net addition numbers of 167,000 at Verizon and losses of 67,000 at AT&T. The carrier was still well behind T-Mobile’s 933,000 net additions, though.
Wells Fargo Senior Analyst Jennifer Fritzsche’s initial reaction was to call the results “solid,” noting good subscriber results despite a highly competitive quarter and continued EBITDA outperformance.
Overall during the quarter, Sprint said it brought in 577,000 total net additions, including 405,000 postpaid net additions. However, the carrier continued its prepaid slide for the seventh straight quarter, with 501,000 prepaid net losses.
Postpaid phone churn of 1.57 percent was up both sequentially and year over year, making it the highest of the four Tier-1 carriers. That’s compared to T-Mobile’s previewed 1.28 percent, AT&T’s 0.98 percent, and Verizon’s less than 0.9 percent. But device upgrades at Sprint were also the highest of the carrier reports so far at 9 percent, topping Verizon’s 8.3 percent and AT&T’s 6.3 percent.
Sprint CEO Marcelo Claure noted the carrier has already achieved $1.6 billion in cost savings and is on track to hit its $2 billion goal before the end of Sprint’s fiscal 2016 year. Analyst concerns remain, though, about what that means for Sprint’s capital spending and, by extension, its network.
As pointed out by BTIG’s Walter Piecyk on Twitter, Sprint’s wireless capital investment for all of 2016 was just $1.7 billion, compared to Verizon’s $3.5 billion in capex spending in the fourth quarter alone. Sprint, however, has argued that it’s using more innovative tools to add coverage and capacity at less cost. Sprint also said its new HPUE technology will help improve coverage and network performance, both indoors and out. Devices compatible with that technology are expected to become available in the coming months, Sprint said.
