SoftBank's Operating and Net Profit Fall

TOKYO—Japan's SoftBank Group Corp.'s operating profit for the fiscal fourth quarter fell 30%, as turnaround efforts continue at Sprint Corp., the struggling U.S. wireless carrier it bought in 2013.

The Japanese telecommunications and Internet company said operating profit fell to 124 billion yen ($1.14 billion) in the January-to-March quarter from ¥ 177 billion a year earlier.

Net profit, the company said Tuesday, fell to ¥ 45 billion from ¥ 89 billion, while revenue rose to ¥ 2.34 trillion from ¥ 2.19 trillion. The company didn't provide earnings forecasts.

The company also wrote down ¥ 153 billion from a valuation loss at its subsidiaries, including Brightstar Corp.—a firm that is fully owned by SoftBank—which runs a global mobile device wholesaler.

The company's domestic telecommunications business is profitable and Yahoo Japan Corp., an Internet portal that is 43% owned by SoftBank, has reported 19 consecutive years of record revenue and profit. SoftBank consolidates Yahoo Japan's financial results into its earnings.

But worries about Sprint, which has more than $30 billion in debt, has weighed on its share price, leading SoftBank to announce a ¥ 500 billion repurchase in February.

SoftBank Chief Executive Masayoshi Son has said his company is dedicated to Sprint's turnaround. In an attempt to demonstrate its commitment, SoftBank increased its stake in Sprint and created a phone-leasing company to help the American carrier's equipment costs.

But while Sprint reported last week an increase in new phone customers for the first three months of the year, it posted lower revenue and lost more money than it did a year earlier.

In what analysts have described as a move that could unlock value from the company's vast portfolio, SoftBank said in March that it would separate its profitable but slow-growing domestic mobile business from its fast-paced but riskier overseas operations.

SoftBank President Nikesh Arora, a former Google executive, will lead the overseas management company, which would include Sprint, a 32% stake in Alibaba Group Holding Ltd. and a range of other Internet and technology companies.

For the full fiscal year, SoftBank's operating profit rose 8.8% to ¥ 999 billion from ¥ 918 billion. Revenue increased by 7.6% to ¥ 9.153 trillion.

Write to Alexander Martin at [e-mail]

(END) Dow Jones Newswires

May 10, 2016 03:35 ET (07:35 GMT)

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