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Sprint Revenue Falls as It Forecasts Jump for the Year

May 3, 2016, 12:53 PM UTC
Inside A Sprint Corp. Store Ahead Of Earnings Figures
A customer talks on a cell phone while exiting a Sprint Corp. store in Woodhaven, Michigan, U.S., on Thursday, Oct. 29, 2015. Sprint Corp. is scheduled to release earnings figures on November 3. Photographer: Laura McDermott/Bloomberg via Getty Images
Photograph by Bloomberg via Getty Images

Sprint, the No.4 U.S. wireless carrier, forecast a jump in full-year operating income as it continues to slash costs to offset the heavy discounts it had offered to attract customers.

The company’s shares were up 6% at $3.70 in premarket trading Tuesday.

Sprint, majority-owned by Japan’s SoftBank Group, said it expected operating income for the year ending March 2017 to be $1 billion to $1.5 billion, a big rise from the $310 million in operating income it posted for the year ended March 31.

The Overland Park, Kan.-based company added 447,000 subscribers in the fourth quarter ended March 31, trailing the average analyst estimate of 518,100, according to research firm FactSet StreetAccount.

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Sprint (S) has been offering deep discounts to win customers from larger rivals Verizon Communications (VZ), AT&T (T), and T-Mobile (TMUS).

It has also been reining in costs, recently shuttering call centers and slashing jobs to save about $2 billion to $2.5 billion.

The company also stuck to its forecast of about $9.5 billion to $10 billion in adjusted earnings before interest, taxes, depreciation, and amortization for the year ending March 2017.

The company’s net operating revenue fell 2.5% to $8.07 billion in the fourth quarter from $8.28 billion a year earlier.

Sprint‘s net loss widened to $554 million, or 14 cents per share, from $224 million, or 6 cents per share.

Analysts on average had expected a loss of 12 cents and revenue of $8.06 billion, according to Thomson Reuters I/B/E/S.