SoftBank Cuts Annual Profit Forecast 10% on Sprint
SoftBank Corp. (SFT), the Japanese wireless carrier led by billionaire Masayoshi Son, cut its full-year profit forecast 10 percent on widening losses at its Sprint Corp. unit in the U.S.
Sprint, acquired in 2013 for $22 billion, is eliminating jobs and changing plans under new Chief Executive Officer Marcelo Claure to help compete with faster growing rivals. SoftBank, the biggest shareholder in Alibaba Group Holding Ltd. (BABA), is counting on international growth as it confronts increased competition and a shrinking population in Japan.
SoftBank also reported second-quarter earnings, which gained a boost from the initial public offering of Alibaba. SoftBank owns more than 30 percent of China’s largest e-commerce company, a stake that is worth about $80 billion.
Shares of SoftBank rose 1.1 percent to 8,027 yen in Tokyo trading before the earnings were announced. The stock has dropped 13 percent this year while Japan’s benchmark Topix index has added 5.1 percent. Sprint shares have slumped 42 percent in New York this year.
Monthly subscribers at Sprint fell by 272,000 in the quarter, including half a million phone customers leaving. The efforts to lure users with price reductions have taken a toll on profits, leading the carrier to lower its forecast for adjusted earnings in the year to Dec. 31.
SoftBank, founded in 1981, has stakes in more than 1,300 companies.
Source: bloomberg-SoftBank Cuts Annual Profit Forecast 10% on Sprint
