SoftBank quarterly profit, sales top estimates as Sprint merger talks end
Tokyo: SoftBank Group Corp. of Japan reported quarterly profit that topped analysts’ estimates, even as its US unit Sprint Corp. faces an uncertain future after talks to merge the carrier with T-Mobile US Inc. collapsed.
Operating profit was 396 billion yen ($3.5 billion) in the period ended September, the Tokyo-based company said in a statement on Monday.
That’s more than the 322 billion yen average of analysts’ projections compiled by Bloomberg. Sales came in at 2.23 trillion yen, matching predictions.
SoftBank’s founder Masayoshi Son has relied on a steady flow of cash from Japanese wireless and telecom operations to fund new endeavors.
At the same time, its US unit Sprint has struggled to return to profit as well as stem subscriber losses.
After merger talks with T-Mobile fell apart over control, Son needs to find a new way to secure Sprint’s long-term future.
The billionaire is also in the process creating the $100 billion SoftBank Vision Fund with Saudi Arabia, Abu Dhabi investor Mubadala Development Co. and other backers to speed up investments in technology start-ups abroad.
The SoftBank founder and chief executive officer was scheduled to address questions about Sprint’s future and the Vision Fund at an analyst conference later on Monday.
“Investors are focusing on what Son has to say about the Sprint problem and Vision Fund investments,” said Masahiko Ishino, an analyst at Tokai Tokyo Securities, prior to the earnings release on Monday.
“Son has also said the Vision Fund won’t end at $100 billion, promising a second and third investment vehicle. More on that would be of great interest,” Ishino added.
SoftBank’s shares, which have risen 28% this year, fell 2.6% to close at 9,945 yen on Monday. The Japanese wireless operator has a market value of about 11 trillion yen, while its public shareholdings are worth about 17 trillion yen. Son has for years maintained that his company is undervalued, urging investors to view SoftBank as a “goose with more golden eggs in its belly”. Bloomberg