Japan's Softbank books record profit as Sprint deal unfolds
- 31 October, 2012 11:49
Japan's Softbank, which announced a US$20 billion deal to acquire U.S. mobile operator Sprint Nextel earlier this month, said it booked a record operating profit in its fiscal first half.
Softbank said its sales in the April-September period edged up 3 percent from a year ago, and its operating profit was ¥402 billion (US$5 billion), its highest ever. Net profit was down 20 percent from last year because of one-time profit booked in the earlier period, without which it would have set a record.
President Masayoshi Son said the company is on track to reach its goal of a trillion yen in domestic operating profit in the next four years, and reiterated his confidence that Softbank's plan to purchase 70 percent of Sprint. The outspoken Son has faced questions in the Japanese press on whether his foray into the U.S. will succeed.
"Why America? Because of the amazing growth in the American mobile market," said President Masayoshi Son, speaking at an earnings news conference in Tokyo.
Son said his company squeezes more profit from its revenue than the U.S. companies it could soon be competing with, AT&T and Verizon. He added that Softbank's purchase of Sprint would accelerate that operator's pursuit of its two larger rivals.
The Softbank founder discussed Sprint's recovery in the U.S., discussing the company's financial recovery and steady increase in mobile contracts recently. He said the company would quickly put its cash injection from Softbank to work strengthening its network and core businesses.
He also stressed the similarity of the U.S. and Japanese markets, saying that together they account for 69 percent of LTE contracts worldwide.
For the current fiscal year through March, Softbank said it expects operating profit to exceed ¥700 billion, 4 percent higher than last period.
Softbank owns a broad portfolio of businesses in Japan, including fixed-line broadband and online properties such as Yahoo Japan. But its mobile business is by far its largest activity, bringing in two-thirds of its revenue and nearly 70 percent of profit.
Separately, Softbank also denied a report in the Sankei business newspaper that it would scale back its planned acquisition of local operator eAccess. The companies said earlier this month that Softbank would purchase its smaller rival for US$2 billion to help strengthen its strained mobile networks.