SoftBank Profit Drops Sharply

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 [e-mail]

(END) Dow Jones Newswires

February 10, 2016 02:55 ET (07:55 GMT)

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