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Sprint on Wednesday morning posted a strong first quarter report (for its fourth fiscal quarter), noting positive net pre- and postpaid net phone additions and a year-over-year bump in revenue.

Though earnings per share of negative 7 cents missed expectations by 4 cents, Sprint’s net operating revenue beat estimates, increasing 6 percent year over year to $8.5 billion. Wireless service revenue of $5.7 billion was down $410 million year over year and $202 million sequentially, but Sprint indicated $200 million in each decrease was caused by changes to the carrier’s device insurance program. As Wells Fargo Senior Analyst Jennifer Fritzsche pointed out, that means service revenue would have essentially been flat on a sequential basis otherwise.

“Sprint took a big step forward in the second year of our turnaround plan,” CEO Marcelo Claure said in a statement. “Net operating revenues returned to growth and cost reductions accelerated, leading to the highest operating income in a decade and a return to positive adjusted free cash flow.”

On the subscriber side, Sprint beat both AT&T and Verizon on postpaid phone net additions with 42,000 subscribers gained during the quarter, and also posted positive prepaid net adds of 180,000. Those figures compare to postpaid gains of 22,000 in the year-ago period and prepaid losses of 264,000 in the first quarter 2016. Sprint said the prepaid gains came courtesy of strong performance from its Boost brand and fewer net losses from its Virgin brand. The carrier ended the quarter with 26.1 million postpaid phone connections.

Total postpaid churn of 1.75 percent was up slightly from 1.72 percent the year prior and 1.67 percent in the holiday quarter. Postpaid phone churn was 1.58 percent. Prepaid churn was down to 4.99 percent compared to 5.65 percent in the same quarter a year ago, and 5.80 percent the prior quarter.

Sprint noted the number of postpaid phone connections on unsubsidized service plans was 74 percent in the first quarter, up from 71 percent in the previous quarter, and 61 percent in the same quarter 2016. The postpaid phone financing rate hit 86 percent in the quarter, up from 71 percent a year ago, and 84 percent in the prior quarter.

Sprint on Wednesday also unveiled a new network technology – a “Magic Box” meant for in-home and in-office deployments that uses dedicated 2.5 GHz channels to enhance both indoor and outdoor coverage. Masayoshi Son, CEO of Sprint parent company SoftBank, said the all-wireless box will help Sprint reach number one or number two in LTE performance by the end of next year. Son said this will be achieved without wasting excess CapEx dollars.

Despite a fairly positive report, Sprint stocks were down nearly 7 percent Wednesday morning. Fritzsche speculated this was partially due to the fact that free cash flow guidance did not improve for the 2017 fiscal year since the company is reinvesting in its business and fighting capital headwinds. The lack of a “tangible” cost cutting goal for 2017 was also a factor, she said. CFO Tarek Robbiati noted some areas where Sprint is planning to cut costs – including in optimizing channel mix and distribution, and improving digital experience to reduce the cost of customer care, among other things – but didn’t set as monetary goal as in 2016.

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