SoftBank Group Corp (9984.T) reported flat first-quarter operating profit as solid earnings for its domestic telecommunications business offset losses at U.S. unit Sprint Corp (S.N).
While the U.S. carrier posted wider losses in quarterly earnings this week, it also said it expected to be cash flow positive in the next financial year.
“Sprint has been a drag, but I’m now seeing signs of a V-shaped recovery at Sprint,” SoftBank’s Chief Executive Masayoshi Son told an earnings briefing.
SoftBank, which owns more than 80 percent of the U.S. wireless carrier, said April-June operating profit increased 0.2 percent to 319.2 billion yen ($3 billion).
The Japanese telecoms and internet conglomerate, which this month said it would buy UK chip designer ARM (ARM.L) for $32 billion in cash, did not provide full-year estimates.
Son has said he went ahead with the ARM deal as he believed he was close to turning around Sprint.
In a sign that a recovery is on track, Sprint added a net 173,000 postpaid phone subscribers in the three months ended June 30 – the biggest increase for any first quarter in nine years.
Son has said he went ahead with the ARM deal because he believed he was close to turning around Sprint.
Before the deal on July 18, SoftBank raised nearly 2 trillion yen in cash in just a few months through asset disposals including the sale of shares in China’s Alibaba.
But investors had expected SoftBank to use the funds to pay down debt or give shareholders a windfall by buying back its own shares, and the ARM acquisition has raised concerns that SoftBank is trying to do too much.
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Credit: Reuters