SoftBank Profit Tops Estimates on Shift to Deals, Investing

SoftBank Group’s earnings are starting to reflect its transition into a company that invests and makes deals, according to Bloomberg.

Operating profit was 479.3 billion yen ($4.3 billion), topping analysts’ projections, in the fiscal quarter ended June, as U.S. unit Sprint returned to profit for the first time in three years. Sales came in at 2.19 trillion yen, matching predictions, the Tokyo-based company said in a statement.

SoftBank’s founder Masayoshi Son has long relied on earnings from Japanese wireless and telecom operations, using the money to make acquisitions and investments. The billionaire is in the process creating the $100 billion SoftBank Vision Fund, which was included in the results for the first time, to speed up investments in technology startups abroad. And the dealmaking is set to continue, with Sprint said to be back in merger talks with T-Mobile US.

Underscoring the notion that SoftBank is becoming more of an investor, the Tokyo-based company reported losses on derivatives of 257 billion yen, which pushed net income to 5.5 billion yen, well below estimates. The loss was related to a financial arrangement a year ago to sell shares in Alibaba through a trust in order to raise funds. Since then, Alibaba’s stock has climbed more than 80 percent, forcing SoftBank to recognize the difference.

Son also expressed interest in the U.S. ride-hailing market, saying that he would be willing to invest in Uber or rival Lyft. The comments follow reports that SoftBank was looking to take a stake in Uber by buying shares from existing investors. Now, it’s clear the Japanese billionaire wants to push into the U.S. market one way or another.

“We are interested in discussing with Uber, we are also interested in discussing with Lyft,“ Son told analysts and reporters after an earnings announcement. “We have not decided which way. But the U.S. is a very big market. It’s the most important market, so we are definitely very much interested.“ SoftBank has already backed Uber’s competitors elsewhere, including China’s Didi Chuxing, India’s Ola and Grab in Southeast Asia.

Even as Sprint struggles to return to profit and stem subscriber losses, Son has set his sights on a possible merger with Charter, the second-largest cable provider in the U.S. He has secured about $65 billion in financing for a possible offer for Charter. At the same time, Sprint is said to have resumed preliminary merger discussions with T-Mobile.

Son has also kept busy in other areas, investing in businesses ranging from ride sharing, co-working and robotics to agriculture, cancer detection and autonomous driving in the past six months. At the company’s annual event for customers and suppliers last month, Son painted a picture of the future where satellite networks cover every inch of the Earth and a trillion devices connected to the internet disgorge data into the cloud to be analyzed by artificial intelligence. SoftBank and its companies will be there at every step of the way, the billionaire said.