SoftBank Group, the Japanese telecommunication and internet behemoth, today announced its earnings for the fiscal second quarter, ending September 2016. The company continued to show steady growth, thanks to the ARM acquisition and its domestic carrier business. It, thus, posted a whopping increase in profits and revenues to beat all Wall Street forecasts.
The operating profit of the company increased by 6.8 percent to amount to 334 billion yen($3.21 billion) as compared to 313 billion yen(approx $3 billion) last year. This was coupled with revenues of 2.14 trillion yen($204 billion) as compared to 2.21 trillion in the same quarter last year. According to analyst estimates, SoftBank was expected to post a revenue of 2.16 trillion yen alongside an operating profit of 302 billion yen.
Though the company might have sold itself short on the revenue front, it did recover the same in operating profits for this second fiscal quarter. SoftBank also posted a net profit of 528 billion yen, in comparison to 258 yen the year before. This quarter, the company invested heavily in the expansion of its telecom network infrastructure and the same will account towards the revenues when the next-gen network becomes operational. The net sales, however, still dropped over 9 percent to 4.27 trillion yen in the current fiscal half
The net sales, however, still dropped over 9 percent to 4.27 trillion yen in the current fiscal half when compared to 4.28 trillion yen in the previous one. The net income for this second half year did get a significant boost in the form of a 339 percent uptick from 427 billion yen766 billion yen. The major highlights of this earnings call are U.S telecom giant Sprint and the company’s latest acquisition ARM Holdings.
The major highlights of this earnings call are U.S telecom giant Sprint and the company’s latest acquisition ARM Holdings. Sprint, owned 83 percent by SoftBank, has been dragging its earnings for the last couple quarters. But, the company is now back on the growth track and has reported a return to operating profit of $16.3 billion in the latest quarter. This has been made possible due to the strong churn rate in postpaid phone subscribers and a lowly cancellation rate.
SoftBank, in its earnings report, also shared that its $32 billion acquisition of ARM is now complete and the chipmaker is now on track to generate 500 billion yen in this fiscal year. Even after the takeover, the chipmaker continues to follow its strategy execution techniques to build upon its already strong growth. This fiscal half of 2016 saw a growth in the shipment of ARM-based chips, which amounted to 7.6 billion. In addition, this news was followed by the company announcing the
In addition, this news was followed by the company announcing the creation of a $100 million technology-focused investment fund in partnership with Saudi Arabia’s public investment fund. This fund will be called the ‘SoftBank Vision Fund’ and be located in UK’s capital London. It will kick-start operations with $25 million with a commitment of another $45 million over the next five years.
Our investments were previously confined to our balance sheet. By creating the new fund, we would be better positioned to leverage the coming opportunities,
said Chairman Masayoshi Son in the earnings statement.
Even since the exit of former president Nikesh Arora, SoftBank has been fairly mute towards its investments in India. The Japanese tech behemoth is, however, now looking to yet again step foot in the country and drive monstrous investments into FreeCharge, Ola, and Snapdeal.