Japan’s SoftBank plans to buy back JPY500 billion ($4.4 billion) worth, or more than 14 per cent, of its own shares over the year to boost investor confidence in the company, which reported an 87 per cent drop in net income last quarter.
The announcement follows a JPY120 billion ($1 billion) share buyback in August.
The operator, the third largest in Japan, posted solid revenue gains in both Japan and the US, with its Sprint unit showing signs of finally turning around, but its net income plunged in fiscal Q3 due to a range of one-off factors, including a reduction in its stake in GungHo Online Entertainment, a videogame provider.
The company’s stock has dropped more than 37 per cent over the past year as investors worry about the outlook for its operations in Japan and the US, Reuters reported.
SoftBank, which acquired Sprint for $22 billion in 2013, said its operating revenue in the US stabilised at $8.1 billion over the past three quarters and expects it to increase this fiscal year ending 31 March. Its adjusted EBITDA jumped 41 per cent to $6 billion year-on-year during the April-December period, with opex declining $800 million.
In Japan mobile revenue increased 1.1 per cent to JPY1.46 trillion during the April-December period from the previous year, while overall telecoms service revenue rose 2.4 per cent to JPY1.79 trillion.
Reuters quoted Naoki Yokota, an analyst at SMBC Friend Research Centre, as saying SoftBank shares have become so cheap now that investors will respond favourably to the buyback.
SoftBank shares surged 16 per cent to JPY5,100 — the daily limit on the Tokyo stock market — in morning trading on Tuesday.