SoftBank Profit Drops Sharply
February 10 2016 - 3:10AM
Dow Jones News
TOKYO—Japanese telecommunications and Internet company SoftBank
Group Corp. said fiscal third-quarter net profit fell 87% from a
year earlier, widely missing expectations.
On Wednesday, the Tokyo-based company said profit for the
quarter fell sharply to ¥ 2.28 billion ($20 million) from ¥ 18.73
billion a year earlier. Analysts expected a profit of ¥ 71 billion.
Operating profit for the third quarter rose 7% to ¥ 189.55 billion
from ¥ 176.69 billion.
SoftBank's results followed better-than-expected earnings from
Sprint Corp., the U.S. wireless carrier that SoftBank bought for
$22 billion in 2013. Sprint has been engaged in a prolonged
turnaround effort.
Sprint's troubles have weighed on SoftBank shares, which in
recent weeks have fallen due in part to doubts about whether Sprint
will be able to pay off its $32 billion in debt. While the
Kansas-based carrier reported healthy subscriber gains and raised
its financial targets for the year ending in March, SoftBank shares
are still at their lowest levels in 2 ½ years.
SoftBank Chief Executive Masayoshi Son has repeatedly said his
company is dedicated to the Sprint turnaround. To show its
commitment, SoftBank has increased its stake in Sprint and created
a phone-leasing company to help cut Sprint's equipment costs.
While these efforts and the aggressive cost-cutting measures
being implemented at Sprint appear to be bearing some fruit,
analysts say it will take years before a turnaround is
possible.
"I think we're beginning to see clear signs for a Sprint
turnaround," Mr. Son said Wednesday.
Write to Alexander Martin at alexander.martin@wsj.com
(END) Dow Jones Newswires
February 10, 2016 02:55 ET (07:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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