SoftBank Corp. share price up, reduces full-year profit projection on mounting losses at Sprint Corp.

Japan-based wireless carrier SoftBank Corp. cut its full-year profit projection due to increasing losses at its Sprint Corp. subsidiary in the U.S.

SoftBank cut its full-year profit forecast by 10%, saying in its statement that its operating profit is expected to be about ¥900 billion ($7.9 billion) for the fiscal year ending March 2015. In comparison, the previous forecast amounted to ¥1 trillion.

The restructuring of Sprint has been closely monitored by a large number of analysts, especially after the subsidiary reported a quarterly loss of $765 million on Monday. The loss was larger than the one of $699 million posted a year ago.

The unit was acquired by SoftBank last year at the price of $22 billion. Under the lead of its Chief Executive Officer Mr. Marcelo Claure, Sprint has been focused on keeping up with its faster growing competitors, which is why it has been betting on lay-offs and changing strategy plans.

One of the analysts, who work at SMBC Nikko Securities Inc. – Satoru Kikuchi – commented on Sprints performance for Bloomberg: “Sprints result was poor, so it affected SoftBank’s performance. Sprint is restructuring while also being aggressive in obtaining new subscribers. This will continue for a while.”

SoftBank, however, also reported that its second-quarter earnings benefited from the Initial Public Offering of Alibaba, in which the Japanese company holds more than a 30% stake that is estimated to about $80 billion. The companys net income amounted to ¥483.1 billion yen over the quarter ended in September 2014. The result was considerably better than analysts forecasts of ¥287 billion. Operating profit failed to reach the ¥301-billion analysts projection and was estimated at ¥259 billion.

SoftBank Corp. rose 1.11% on Tuesday in Tokyo to close at ¥8 027 per share, marking a one-year change of +6.32%. The company is valued at ¥9.53 trillion. According to the Financial Times, the 15 analysts offering 12-month price targets for SoftBank Corp. have a median target of ¥9 970, with a high estimate of ¥11 400 and a low estimate of ¥7 800. The median estimate represents a 25.58% increase from the previous close of ¥7 939.