Japan's SoftBank third quarter profit slips 5.9pc, no end to Sprint costs
Japan's SoftBank Corp said its third-quarter operating profit slid 5.9 percent, missing estimates, as the ambitious mobile telecom firm continues to soak up the cost of trying to turn around loss-making U.S. unit Sprint Corp.
SoftBank, which took over the number 3 U.S. carrier for more than $20 billion in 2012, said October-December operating profit was 191.39 billion yen ($1.6 billion), down from 203.46 billion yen a year ago. That trailed the 219.08 billion yen average of five analysts' estimates compiled by Thomson Reuters StarMine.
Japan's third-biggest mobile carrier by subscriber numbers kept its operating profit forecast for the fiscal year ending March unchanged from 900 billion - having cut the target by 10 percent in its last quarterly report citing Sprint costs.
"Overall, SoftBank is doing well, but with Sprint...being in a tough situation, I think it will have a long battle to fight," SoftBank's Chief Executive Masayoshi Son told reporters in Tokyo.
The comments echoed Son's message from the previous quarter, underlining the scale of the task in ending losses as Sprint. The company, 80 percent-owned by SoftBank, is locked in intense competition with larger rivals AT&T Inc and Verizon Communications Inc to retain subscribers.
Earlier this month, Sprint reported revenue for the quarter ended December fell less than expected, as the U.S. mobile provider attracted more subscribers by cutting prices and offering promotions. Still, Sprint's net loss more than doubled to $2.38 billion.
SoftBank bought the number three U.S. mobile carrier as part of Son's drive to expand outside Japan's sluggish economy, but Sprint has been undergoing a painful revamping of its network, cutting thousands of jobs, that has caused a mass exodus of subscribers.
On Tuesday SoftBank said it booked a loss of 29.51 billion yen to cover in severance costs associated Sprint job cuts. In the same period a year earlier, the comparable figure was 5.34 billion yen.