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Sprint heads higher in pre-market on narrower-than-expected Q3 loss, T-Mobile merger reports

Reports this week have suggested that Sprint and rival carrier T-Mobile could announce a merger as early as next month

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Analysts had expected Sprint to add 225,000 new customers in the quarter

Sprint Corporation (NYSE:S) headed higher in pre-market after the US wireless carrier reported a smaller-than-expected second quarter loss, as the rumoured merger with T-Mobile US Inc (NASDAQ:TMUS) reportedly moves closer to completion.

Starting with the quarterly figures, Sprint told investors that its growth for post-paid subscribers as well as regular customers who pay at the end of the month was the highest it’s been for more than two years.

The company – the fourth largest wireless carrier in the US – added 279,000 post-paid phone customers during the three months ended September 30, along with 95,000 pre-paid customers.

Free data offer works

That rise was largely driven by Sprint’s offer of a free year of unlimited data for customers who were switching from a rival carrier.

Sprint posted a second quarter net loss of US$48mln, or 1 cent a share, compared to a loss of US$142mln, or 4 cents per share, a year earlier.

Net operating revenue fell slightly to US$7.93bn from US$8.25bn in the second fiscal quarter of 2016.

Analysts polled by Thomson Reuters had expected a loss of 2 cents per share and revenue of US$8.05bn.

“Sprint was able to deliver net additions in both its postpaid phone and prepaid business for the third consecutive quarter,” said chief executive Marcelo Claure.

“I’m even more proud that the team was able to deliver this customer growth while continuing to attack the cost structure, improve the network, and maintain positive adjusted free cash flow.”

Merger speculation mounts

The results came as speculation mounts over a possible merger between Sprint and T-Mobile.

Reuters reported this week that the two carriers were laying the groundwork for special committees of their boards to decide on the deal.

Sprint and T-Mobile are expected to announce an agreement as early as next month which would create a company with a combined 130mln US subscribers.

Like T-Mobile on Monday, Sprint didn’t elaborate on the speculation over the merger.

“Sprint was able to deliver net additions in both its postpaid phone and prepaid business for the third consecutive quarter,” said chief executive Marcelo Claure.

“I’m even more proud that the team was able to deliver this customer growth while continuing to attack the cost structure, improve the network, and maintain positive adjusted free cash flow.”

Shares rose 0.7% to US$7.05 shortly before the markets opening in New York.

Quick facts: Sprint Corporation

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NYSE:S
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