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Sprint CEO Marcelo Claure's cost cutting strategy brings profit

Sprint CEO Marcelo Claure's cost cutting strategy brings profit

The carrier drew praise from analysts for posting its first quarterly profit in three years - $206 million compared with a loss of $302 million a year ago - but revenue fell 4.5% to $8.2 billion and it added fewer customers than rivals.

The company said it expects to save an additional $1.3 billion to $1.5 billion in lower costs through fiscal 2017.

On the M&A front, Sprint (s) has been reportedly in talks with competitor T-Mobile (tmus) as well as the two cable giants getting into wireless, Comcast (cmcsa) and Charter Communications (chtr).

Combining No. 3 T-Mobile and fourth-place Sprint would create an entity large enough to challenge the duopoly of Verizon Communications and AT&T.

As I reported a year ago, Charter acquired Time Warner Cable for $78 billion in 2016.

"This represents the progress of a turnaround journey that has delivered improvements in postpaid phone and prepaid customer growth, a return to top-line growth, and a significantly transformed cost structure", CEO Marcelo Claure said in a statement Tuesday.

He would not give specifics on merger discussions, adding Sprint would leave doing so to an announcement that "should be coming in the near future".

Most importantly, Sprint was able to gain 88,000 new postpaid additions during the quarter that ended on June 30th, 2017, the eight consecutive quarter of additions for the carrier. He also maintained Sprint can be sustainable as a standalone company, but he made it clear the carrier is eagerly pursuing a tie-up with a variety of players.

"There's a lot of different goodness to it", Claure said on a call with reporters after the results were released.

That puzzled Claure, who said repeatedly that Sprint hadn't been offered to Charter. Our skepticism about Sprint's deal-making has nothing to do with Sprint's intrinsic attractiveness; its subscriber base is inherently appealing to anyone wanting scale, and its spectrum trove of 2.5 GHz spectrum really does have incremental value. This comes after The Wall Street Journal said that Charter wasn't interested in Sprint.

The stock rose in early trading, but you'd be wrong to think this means Sprint is out of the woods. In the prior quarter Sprint added 43,000 net postpaid subscribers.

Sprint achieved almost $370 million of combined reductions in cost of services and SG&A expenses in the quarter, bringing the total reduction during the last nine quarters to almost $4 billion.