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Sprint Focuses on Cost-Cutting Measures to Boost Profitability

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Jun. 5 2019, Published 1:04 p.m. ET

Cost-cutting to combat losses

In fiscal 2018 (year ended March 2019), Sprint (S) realized ~$330 million in net cost reductions YoY in combined operating expenses in cost of services and SG&A (selling, general, and administrative) expenses. Sprint eliminated $1.1 billion in costs during fiscal 2017. These reductions in costs are particularly important for Sprint, considering it continues to generate losses.

In fiscal 2019, Sprint plans to continue to look for opportunities to enhance its operational and cost efficiencies. However, the improvements are anticipated to be largely offset by incremental expenses related to network and customer experience initiatives.

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Sprint’s adjusted EBITDA

Sprint’s ongoing measures to decrease its costs have been reflected in the company’s increasing adjusted EBITDA. The telecom company reported adjusted EBITDA of $3.1 billion in the fourth quarter of fiscal 2018 (quarter ended March 31) as compared to $2.8 billion in the fourth quarter of fiscal 2017. The company’s adjusted EBITDA margin significantly expanded to ~55.4% in the fourth quarter of fiscal 2018 from ~47.2% in the year-ago quarter.

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