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Sprint heralded its first positive profit figure in three years on Tuesday, despite reporting a year-over-year drop in net additions and increased churn in the second quarter.

The carrier posted net income of $206 million in the period, up from a net loss of $302 million a year ago and a loss of $283 million in the prior quarter. Net operating revenue of $8.2 billion was up $145 million year over year thanks to higher equipment revenue, but down $382 million sequentially. Wireless service revenue of $5.7 billion was down both year over year and sequentially, but Equipment revenue of $2.1 billion was up year over year thanks to a $350 million boost from the sale of used devices, Sprint noted. Earnings per share of 5 cents beat Wall Street expectations by 10 cents.

Sprint shares jumped more than 11 percent Tuesday morning on the news.

But the perky financials belied weaker postpaid churn and average billing per user (ABPU), as well as drop in postpaid phone additions. Postpaid phone net additions of 88,000 were down from 173,000 in the year ago period. That was due to increased competitive pressure from the introduction of Verizon’s unlimited plan, but CEO Marcelo Claure said net addition figures for July (115,000) were back to normal. Only 1 percent of the second quarter net addition figures came from Sprint’s free unlimited service offer, Claure said.

Postpaid phone churn of 1.50 percent was up from 1.39 percent from the year prior. However, Sprint noted that figure would have been 1.58 percent if not for changes to the way it reports subscriber figures. ABPU of $69.51 ticked up a hair sequentially, but was down from $72.17 year over year. Sprint attributed the drop to “lower insurance revenue resulting from the change in the company’s device insurance program.”

“Sprint’s financial position remains challenged as its balance sheet is highly leveraged and the company currently holds over $34 billion in long-term debt,” Technology Business Research Telecom Analyst Steve Vachon observed. “Additionally, Sprint reported negative free cash flow (non-adjusted) of -$253 million in 2Q17 and improving free cash flow will remain challenging as the company will need to continue to increase capex to support its unlimited data strategy long-term.”

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