As merger speculation swirls around Sprint Corp. (S) , the wireless company posted positive quarterly net income for first time in three years before the market opened on Tuesday.

Sprint's first fiscal quarter earnings of 5 cents a share topped expectations for a loss of 1 cent a share, while revenues of $8.2 billion were slightly ahead of expectations of $8.16 billion. Shares of Sprint gained more than 7% to $8.57 in early morning trading on Tuesday.

CEO Marcelo Claure told investors on its earnings call on Tuesday that Sprint has had "many discussions" with companies in wireless and other industries and is "very encouraged by the possibilities," but did not address the possibility of a deal with Charter Communications Inc. (CHTR) or T-Mobile USA Inc. (TMUS) .

"We are going to leave that to a final announcement that should be coming in the near future," he said regarding Sprint's negotiations with other companies. Talks have been ongoing since the government lifted a quiet period for participants in a wireless spectrum auction in April.

Charter said Monday that it has "no interest in acquiring Sprint" as speculation of a deal sparked over the weekend.

"I was a bit surprised to see an announcement like that from Charter," Claure said, adding that Sprint was never offered for sale to Charter. 

Claure called the latest quarterly numbers "our best financial performance in almost a decade."

All four of the mobile carriers have unlimited plans, ratcheting up competition for subscribers. Sprint gained 88,000 net postpaid phone accounts in the quarter as it offered free service for a year for Verizon postpaid customers who switch carriers. The number of additions were double the prior quarter, but missed Wall Street forecasts of 116,000. 

"When Verizon went unlimited the tables turned for a month or two," Claure said of subscriber trends, while adding that the market is "back to normal." Sprint gained more customers in July than in the first fiscal quarter, he said, noting that the fall launch of Apple Inc's (AAPL) iPhone could ramp up competition between the carriers.

"Importantly, [the postpaid growth] came even with feeling the full impact of a full quarter of [AT&T]'s and [Verizon]'s unlimited plan push," Wells Fargo Securities LLC analyst Jennifer Fritzsche wrote in a Tuesday note. 

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