SoftBank Profit Disappoints as Sprint Turnaround Continues

TOKYO—Japan's SoftBank Group Corp. on Wednesday reported weaker-than-expected net profit for its fiscal second quarter, as it works to turn around Sprint Corp., the struggling U.S. wireless carrier it acquired in 2013.

The Japanese telecommunications and Internet giant posted a net profit of ¥ 213 billion, which was below analyst expectations for ¥ 262 billion.

Operating profit for the July to September quarter rose 39% to ¥ 342.21 billion from ¥ 245.59 billion a year earlier. Operating revenue rose to ¥ 2.28 trillion from ¥ 2.07 trillion.

SoftBank's earnings come after Sprint said on Tuesday that it added more postpaid phone customers than it lost in a quarter and had its lowest cancellation rate in company history. But the carrier's subscriber additions still fell behind those of rival T-Mobile US Inc., and Sprint posted a net loss of $585 million in the second quarter, showing that despite winning back some customers, its losses are continuing to mount.

SoftBank Chairman Masayoshi Son recently reaffirmed his commitment to turn around the struggling U.S. wireless carrier by increasing SoftBank's stake in Sprint and purchasing a house near Sprint's headquarters.

But concerns linger about its future. "Sprint's network isn't bad, it's been taking cost-cutting measures and seeing an increase in subscribers. But whether its competitiveness is recovering is a matter of debate," said Satoru Kikuchi, an analyst at SMBC Nikko Securities.

Write to Alexander Martin at [e-mail]

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November 04, 2015 01:55 ET (06:55 GMT)

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