A deal won't be made until the 'time is right.'
While seemingly everyone in the world is waiting for Sprint CEO Marcelo Claure to make a deal, the boss is still also focused on fixing the wireless carrier’s own business. And there was good news on that score on Tuesday, even as the much leaked deal talks continued to fizzle.
Major cost cutting efforts and some compelling promotions, including offering a year of free service, helped Sprint on Tuesday report its first quarterly profit in three years. On target to cut up to $1.5 billion this year, the carrier said it made a profit of $206 million, or five cents a share, in the three months ended June 30, its fiscal first quarter. That reversed a loss of $302 million a year ago and beat analysts expectations of a 1 cent a share loss.
Asked about the sustainability of the return to profitability, Claure pointed to the revenue growth of the past few quarters. Sales increased 2% to $8.2 billion in the past quarter, as it added 88,000 regular monthly phone customers.
“There’s a lot of different goodness to it,” Claure said on a call with reporters after the results were released. “In a subscriber business, it is really hard to turn around revenue when a company was losing millions of customers. That’s the first indication of a sustainable turnaround.”
Shareholders were impressed. Sprint’s stock jumped 10% at midday on Tuesday, putting it in positive territory for the year with a total gain of 5% in 2017.
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On the M&A front, Sprint s has been reportedly in talks with competitor T-Mobile tmus as well as the two cable giants getting into wireless, Comcast cmcsa and Charter Communications chtr . But after abundant rumors, Charter issued a statement this weekend that it had “no interest” in acquiring Sprint.
That puzzled Claure, who said repeatedly that Sprint hadn’t been offered to Charter. “I have no idea where Charter came from saying (they’re) not interested in buying Sprint,” Claure said. “Sprint was never offered for sale to Charter. That caught us a little off guard.”
Analysts see tremendous financial benefits to a Sprint-T-Mobile deal, if regulators would go along. “Hopefully, after a two-month hiatus during which Sprint has been in discussions with cable, the two sides can settle differences and secure the deal that would clearly bring the most value to both companies,” analyst Jonathan Chaplin of New Street Research noted on Tuesday.
About that rumor that Sprint had set aside talks with T-Mobile during a supposed two month exclusive period to negotiate with Comcast and Charter, Claure said the reports were “not necessarily factual.”
A deal is coming, he promised, adding he was “highly encouraged” by early talks with potential partners. “We have spoken to everybody and we have choices and when the time is right we going to strike a deal,” he said. “And that deal is going to benefit most of Sprint shareholders.”