Sprint said that 2015 saw its first operating profit for nine years, with chief Marcelo Claure branding it a “transformational year” in the company’s turnaround, but not all was rosy for the troubled operator.
Accentuating the positives, the company also said that fiscal fourth-quarter contract subscriber phone additions of 22,000 mark its third consecutive period of gains, and are “more than both Verizon and AT&T for the first time on record”.
“These accomplishments provide positive momentum heading into fiscal year 2016 and put the business on a path to sustainable free cash flow,” Claure said.
But total Sprint platform additions in the quarter of 447,000 (driven by wholesale and affiliate gains) were down from 1.25 million in the prior-year period, and the 2.67 million total additions for the year compared with 2.59 million in fiscal 2015.
It ended the period with 58.81 million connections.
T-Mobile, once a close competitor to Sprint in terms of subscriber numbers, added 2.2 million net customers in the most recent quarter, taking its total to 65.5 million.
For the fourth quarter, Sprint reported a net loss of $554 million, compared with a prior-year loss of $224 million.
Operating income of $8 million compared with a prior-year $318 million, with Sprint noting factors including severance and lease exit costs, including the WiMAX shutdown which will “free up valuable spectrum and immediately lower network costs”.
It said that “adjusting for charges in both periods, operating income would have been relatively flat year-over-year”.
Revenue for the three months was $8.07 billion, down from $8.28 billion.
For the full year, a net loss of $2 billion was down from $3.35 billion, on revenue of $32.18 billion, down from $34.53 billion. The all-important full-year operating profit of $310 million compared with a prior-year loss of $1.9 billion.
Sprint also said that it has “taken several actions to improve its financial flexibility”, with $11 billion of committed liquidity, up from $6 billion at the end of the third quarter. It also has access to $1.2 billion of vendor financing which can be used for 2.5GHz equipment.
On Friday, the company announced its second sale and lease back deal for devices with Mobile Leasing Solutions, which is expected to generate $1.1 billion of cash proceeds, and $2 billion of bridge financing arranged by Mizuho Bank.
In a statement, Sprint said that “significant network improvements, a more compelling value proposition, and better customer quality” had led to higher customer retention.