Sprint Corp. (S - Get Report) posted a first quarter loss that was largely in-line with analysts' forecasts as it continues to press for clearance for its pending $26 billion merger with T-Mobile US (TMUS - Get Report) amid pushback from U.S. lawmakers.
Sprint said its loss for the three months ending in June, the company's fiscal first quarter, was pegged at 3 cents per share, down from a profit of 4 cents per share over the same period last year. Group wireless revenues, Sprint said, came in at $5.3 billion, down 3% from last year, while total revenues were essentially flat to last year at $8.142 billion but just ahead of the Street consensus forecast of $8.06 billion.
Sprint also said it lost a net 128,000 phone subscribers over the three month period, a better tally than the 150,000 loss forecast from FactSet estimates.
"While we delivered good results in the first quarter relative to expectations, the business still faces several structural headwinds and I remain convinced the merger with T-Mobile is the best outcome for our customers, employees, industry and all stakeholders," said CEO Michel Combes.
"With the recent clearance of our merger by the Department of Justice, and the anticipated approval from the FCC, we are moving one step closer to building one of the world's most advanced 5G networks and providing American consumers a better network and overall experience at New T-Mobile."
Sprint shares were marked 6% lower in early Friday trading, however, and changing hands at $6.76 each amid reports that Texas has joined at least a dozen U.S. states in a lawsuit that seeks to block its agreed merger with T-Mobile US. the move leaves the stock with a year-to-date gain of around 16%.
"Whether Americans reside in big states or in small, in rural areas or in urban centers, on the coasts or in the heartland, it is clear that this merger is bad for consumers, bad for workers, and bad for innovation, and our growing momentum clearly continues to make that point," New York Attorney General Letitia James said in a statement that was signed by Attorneys General Ken Paxton of Texas and Xavier Becerra of California.
Last month, the U.S. Department of Justice gave its formal blessing for the tie-up, based on the concessions ironed out between the two companies, which includes selling assets to Dish Network (DISH - Get Report) to even out the competitive playing field.
Staff at the Justice Department's antitrust division had initially recommended in May that the agency sue to block the proposed deal, citing anti-competitive practices.
Coined as a proposed settlement, T-Mobile and Sprint must divest Sprint's prepaid business, including Boost Mobile, Virgin Mobile, and Sprint prepaid, to Dish Network, the Justice Department said. The proposed settlement also provides for the divestiture of certain spectrum assets to Dish.
T-Mobile and Sprint must also make available to Dish at least 20,000 cell sites and hundreds of retail locations. T-Mobile must also provide Dish with robust access to the T-Mobile network for a period of seven years while Dish builds out its own 5G network.