Sprint has posted its final results for the fiscal third quarter of 2018, boasting continued growth in the leadup to a possible merger with T-Mobile accented by losses, both of which fell in above analyst expectations. The news isn't necessarily good for the nation's fourth-largest service provider. The company posted an overall loss but did appear to make some headway.
Sprint's net income for the fiscal quarter landed at a loss of $141 million, down by a difference of more than $7.3 billion from the same quarter in 2017. Operating income is reported as being down by approximately 34.1-percent to $479 million from last year's $727 million. Likewise, net cash from its operating activities fell by $458 million and free cash flow is reported as down by $1.305 billion year-over-year.
$7.1 billion of the largest of those losses is attributed to a tax benefit the company had received in the previous year, diminishing the impact and seriousness of the loss. Adjusted EBITDA was up for the quarter over the previous year by $382 million, representing its highest such figure in twelve years. For postpaid net additions, the company managed to post 309,000 additions in the quarter. That's a year-over-year improvement of 53,000 postpaid net additions.
Sprint makes headway in revenue amid higher churn rates
The mixed figures reported by the company continue nearly across the board but Sprint did make at least some positive gains. It's total operating revenue, in spite of its approximately $8.21 billion in operating expenses, landed at $8.601 billion. That's around a 2-percent gain quarterly and 4.4-percent increase year-over-year.
Although Sprint gained ground in terms of revenue, some net additions were down and churn rates were up. Postpaid additions increased to 309,000. That's a rise of around 53,000 but prepaid net adds fell to 173,000 and postpaid phone adds to 26,000. That combines to give the carrier a total growth of just 48,000 net additions across the board compared to 385,000 last year for the same period. For the full year, net adds were down from 824,000 to just 85,000.
Churn rates for the company rose by 0.07-percent quarterly and 0.05-percent yearly on the postpaid side, landing at 1.85-percent overall. Postpaid phone churn was worse, rising by 0.11-percent over last quarter and 0.13-percent from last year. On the prepaid side, where Sprint arguably ordinarily has stronger footing, churn rates were up by 0.09-percent and 0.2-percent quarterly and yearly.
Standing alone for an overall downturn
Sprint's mobile networking business has seen big improvements over the years in terms of service, speed, and coverage but the company's latest report still seems to show it on a downward trend as it prepares to enter the 5G era. The company has recently claimed that it will be able to roll those next-gen networks out without any help from the still-uncertain merger with T-Mobile.
Executives from the company near the end of 2018 touted the start of that with 25,000 small cells and tens of thousands of site upgrades to accommodate the incoming changes. That has continued in Sprint's most recent report, with the service provider pointing to a near-doubling of expenditures at $1.4 billion on network updates over the previous year. That places it on-track to launch mobile 5G over the "coming months," the latest report says.
Regardless, Sprint's mixed results may point to an underlying instability in its bottom-line, further indicated by a drop in its stock prices -- which fell $0.03 from last quarter and a total of $1.82 from last year.