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In the telecom battle to add customers, Sprint Corp. (NYSE:SC) is doing fairly well. In the battle to turn a profit, not so much.

The company added 22,000 net postpaid phone subscribers in Q1 2016, albeit thanks to very aggressive discounting. Nonetheless, Sprint posted lower revenue than a year ago.

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By The Numbers

For the period ended March 31, Sprint reported a $554 million loss (-$0.14 per share). This was more than double the $224 million (-$0.06 per share) loss of a year ago. Revenue dropped 2.5% to $8.07 billion.

Looking ahead, the company said it expects adjusted 2016 fiscal year earnings before interest, taxes, depreciation and amortization to be between $9.5 billion and $10 billion.

At the close of trading Wednesday shares were down nearly 5.5% (-$0.20) to $3.47.

Customer Count

Sprint has been selling its service at half the price of rivals including Verizon Communications Inc. (NYSE:VZB) and AT&T Inc. (NYSE:TB). Both lost customers during the quarter.

The company, however, trailed T-Mobile US Inc. (NYSE:TMUSC), which added 877,000 phone customers during the same period.

In a research note, Craig Moffett of MoffettNathanson wrote, “If you offer a fifty percent discount to the competition, there’s something wrong if you DON’T add subscribers.”

According to Sprint CEO Marcelo Claure, however, the customer gain was good when compared with how badly the company performed just a few years ago. In Q1 2015, for example, Sprint lost 201,000 customers.

Sprint's customer base at the end of Q1 was 58.8 million, including prepaid and wholesale connections.

Never Say Die

Claure’s goal of achieving the No. 1 or No. 2 network was considered bold at the 2015 Code conference.

Now, with billions in spending cuts, the goal seems next to impossible. Not that Claure has noticed.

“The goal has not changed,” Claure said earlier this week. “We are determined to reach that.”

Despite this, some like New Street research analyst Jonathan Chaplin have said the real goal is being solvent enough to be acquired by T-Mobile.

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Analysts Weigh In

Sprint’s focus on its transformation has won both praise and pans from investment analysts.

Wells Fargo Securities analyst, Jennifer Fritzsche said, “In our view, Sprint is making great strides on its turnaround strategy,” reflecting what she called a “disciplined approach.”

On the other hand, Jefferies Equity research analyst Mike McCormack had doubts about Sprint network investment plan. “In our view,” he said, “a delay until fiscal year 2017 on (network) densification could make sustainable subscriber gains problematic.”

Mixed ratings also abound with Woo Trader’s current performance weighted rating at “Perform,” Zacks rating set at “Hold,” and TipRanks rating the stock “Sell.”

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