Sprint (NYSE: S) shares jumped more than 24% during later afternoon trading and its first quarter revenue is also the biggest increase for any first quarter in nine years, which is great thanks to its aggressive big discounting promotion for its postpaid net subscribers. The last highest price for Sprint stock was in November, 2014.
By adding 173,000 postpaid net subscribers and 50% off promotion for the standard monthly charges in competing with its rivals Verizon, AT&T and T-Mobile, Sprint successfully attracted 377,000 new customers, comparing with its net loss of 12,000 subscribers in the same period last year.
“More Verizon customers switched to Sprint than Sprint customers left for Verizon, and this was the case with AT&T and T-Mobile as well,” Chief Executive Marcelo Claure said. While low prices for net subscribers would not last longer and higher prices are coming in the “not too distant future” from Mr. Claure.
At the same time, Sprint is also in the process of a cost-cutting plan to cut $2.5 billion dollars since last October. Sprint said it had reduced overhead costs by $550 million and remaining $2 billion need to cut from its operating expenses until the end of the fiscal year.
Sprint Corp., took over about $22 billion in 2013 by Japanese tech giant SoftBank by 80 percent stake. Its huge debt load of over $30 billion and now has an $11 billion liquidity cushion, which includes cash on hand as well as available borrowing capacity. In all for the period ended June 30, Sprint posted a loss of $302 million, or 8 cents a share, wider than its loss of $20 million, or a penny a share, a year earlier. Its net operating revenue fell to $8.01 billion.