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Softbank posts 50% operating profit margins in its mobile business

Japan's No. 3 mobile carrier Softbank Corp. Chief Executive Masayoshi Son speaks during a news conference in Tokyo Thursday, Feb. 5, 2009. Softbank said Thursday that its core business grew in the third quarter but that net profit fell 63 percent without the benefit of one-time gains last year from a new listing of a Hong Kong affiliate. Softbank posted a net profit of 17.1 billion yen ($191.1 million) for the October-December quarter, compared with 46.7 billion yen during the same period a year earlier. (AP Photo/Katsumi Kasahara
AP Photo/Katsumi Kasahara
Softbank CEO Masayoshi Son yearns for Sprint’s subscribers.
  • Gwynn Guilford
By Gwynn Guilford


JapanPublished This article is more than 2 years old.

The numbers: Fine. The Japanese wireless carrier and internet company announced fiscal-year earnings of ¥3.4 trillion ($35 billion), up from ¥3.2 for the previous fiscal year. Net income fell 7.8%, though, coming in at ¥289 billion.

The takeaway: The company seems bent on acquiring subscribers to keep its revenue growing, and its $20 billion bid for a 70% stake in Sprint Nextel would jump-start that. A successful acquisition would bring it within spitting distance of Verizon’s 99 million subscribers worldwide, it said in its earnings presentation. Meanwhile, Softbank’s mobile business is booming. Mobile service revenue is up 9%, while its 50% mobile EBITDA margins are the highest among the world’s leading carriers (pdf), beating out Verizon’s 47% and Japanese competitor NTT Docomo’s 42%.

What’s interesting: The company projected more than ¥1 trillion in operating profit for the next fiscal year, which runs from April 2013 to March 2014, despite that it expects its bid for the unprofitable Sprint to be successful. Softbank’s credit ratings are on the verge of being deemed junk, since Moody’s and Standard & Poor’s are worried that Sprint will weaken Softbank’s finances. Softbank has said that it won’t raise its $20 billion offer for Sprint, even as the Dish Network outbid it with a $25.5 billion offer earlier in April. Softbank today called  Dish’s offer “incomplete and illusory” in a company presentation (pdf). A shareholder vote on Softbank’s offer is currently set for June 12.

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