SoftBank's Q1 profit up 19% riding on Alibaba stake sale

TOKYO: SoftBank Group's firstquarter profit rose 19 per cent as proceeds from selling part of its stake in Alibaba Group Holding helped make up for losses at Sprint Corp. Net income at the Japanese wireless carrier rose to 254.2 billion yen ($2.4 billion) in the three months ended June 30, the Tokyo-based company reported on Thursday.

SoftBank's operating profit was 319.2 billion yen. Sprint reported a $302 million loss in the quarter as the money-losing US carrier focused on growing its subscriber base over profit.

The gradual turnaround at Sprint has been overshadowed by SoftBank founder Masayoshi Son's $32 billion deal for chip designer ARM Holdings. The company's biggest ever acquisition came just weeks after the departure of President Nikesh Arora, who is credited with a portfolio reshuffle that generated the cash needed for the purchase. The changes have left investors wondering about Son's strategy for a company burdened by more than $100 billion of debt.

"The ARM acquisition will have a major balance sheet impact in the short term and there has yet to be a satisfactory explanation of how and when it will become a core business for SoftBank," Tomohisa Nonomura, an analyst at Toyo Securities, said before the earnings announcement.

"Sprint recovery is picking up steam. We can now consider the timing of their return to profit. Domestic operations continue to generate steady profits." SoftBank posted gains of 204.2 billion yen in the June quarter, mainly on trimming the Alibaba stake with further profits expected in the current period.