UPDATE 2-Sprint earnings beats price quotes as discounts attract customers

The logo design of U.S. mobile network operator Sprint Corp is seen at a Sprint shop in San Marcos, California August 3, 2015.

Reuters/Mike Blake

<articleLocation” > Sprint Corp (S.N) reported better-than-expected first-quarter profits on Monday as big discount rates helped it bring in more postpaid customers, and the No. 4 U.S. cordless carrier stated it had enough money to fund its business this year. Experts and investors had raised questions about Sprint’s monetary position after majority owner SoftBank Corp (9984. T) agreed earlier this month to buy UK chipmaker ARM Holdings Plc (ARM.L) for $32 billion. “We expect that we will have appropriate sources to offer all the capital required to money the business and pay back the debt maturities due in FY 16,” Chief Financial Officer Tarek Robbiati said on a conference call with analysts. Sprint, whose shares increased more than 18 percent in early trading, reported 173,000 postpaid cordless additions in the three months ended June 30 – the greatest increase for any very first quarter in nine years. That compared with a net loss of 12,000 customers in the very same duration last year.

The quarter likewise had the lowest postpaid phone churn in the company’s history, Chief Executive Marcelo Claure stated in a statement. Postpaid phone user churn, or the rate at which customers defect to other networks, was 1.39 percent. “Our company believe the turnaround story is taking shape,” Wells Fargo analyst Jennifer Fritzsche said in a client note.

However, the company’s bottom line broadened to $302 million, or 8 cents per share, in the period from $20 million, or 1 cent per share, a year previously. The most recent quarter consisted of contract termination charges of $113 million, mostly associated with an arrangement with wireless carrier Ntelos.

Sprint, in which Japan’s SoftBank holds a more than 80 percent stake, said its net operating revenue fell marginally to $8.01 billion. Analysts typically had expected $7.98 billion, according to Thomson Reuters I/B/E/ S. Up to Friday’s close of $4.62, Sprint’s shares had actually increased 27.6 percent because the start of the year. (Reporting by Aishwarya Venugopal in Bengaluru; Editing by Maju Samuel and Ted Kerr).

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