SoftBank Tops Estimates as Sprint Finally Delivers Income

SoftBank Tops Estimates as Sprint Finally Delivers Income
SoftBank

SoftBank’s fourth-quarter profit topped analysts’ projections, thanks to Sprint’s first annual net income in more than a decade, according to Bloomberg.

The Japanese telecommunications provider and technology investor said operating profit was 155 billion yen ($1.4 billion) in the three months ended March, more than the 137.4 billion yen average of analyst estimates. Revenue was 2.35 trillion yen.

The results are overshadowed by the sale of Sprint, a deal that SoftBank founder Masayoshi Son had pursued for years. T-Mobile last month agreed to acquire the smaller rival for $26.5 billion in stock, but the merger is likely to face heavy scrutiny from regulators. SoftBank is also planning an initial public offering of its domestic telecom operation, as Son has shifted his focus to SoftBank’s longer-term future and investments in overseas technology companies.

Revenue from domestic telecom operations, which include wireless, broadband and fixed-line services, was mostly flat at 3.23 trillion yen last year. Profit declined 2.6 percent to 1.18 trillion yen after the company offered discounts to lure users and increased capital outlays to improve network quality. SoftBank, which has 33 million mobile subscribers, said sales and profit will increase this fiscal year.

The Vision Fund contributed 303 billion yen to income in the year ended March, the company said. The amount mainly reflects an unrealized gain on valuation of SoftBank’s investment in Nvidia. The company took a stake of just less than 5 percent in the chipmaker last year. Nvidia’s stock rose 81 percent in 2017 and another 20 percent this year to March.

Son has stepped up investments in technology companies over the past year, using cash flow from his telecom operations to take stakes in startups such as Uber, China’s Didi Chuxing and India’s Flipkart. Combined investments by the Vision Fund, SoftBank and other entities totaled $29.7 billion to date. Son said he expects several IPOs a year from the fund.