The interior of a T-Mobile retail store. (T-Mobile USA)

T-Mobile 1Q Revenue Jumps as it Absorbs MetroPCS Users

By Earnings FOXBusiness

T-Mobile US (TMUS) reported sharply higher first-quarter revenue as efforts to distance itself from traditional carriers and the takeover of MetroPCS led to a record increase in users.

Continue Reading Below

The carrier posted a loss of $151 million, or 19 cents a share, compared with a year-earlier profit of $107 million, as integration costs ballooned.  That was worse than the 10-cent loss predicted by analysts in a Thomson Reuters poll.

However, revenue climbed 47% to $6.88 billion from $4.68 billion a year ago as the carrier recorded 2.4 million total net customer additions -- the first time it ever exceeded 2 million in a single period -- by absorbing the business of MetroPCS.

The results were slightly below the $6.92 billion forecast by the Street.

Excluding the acquisition, T-Mobile said sales grew by 15.3% on a pro-forma basis, a reflection of stronger equipment sales and service revenue.

Its shares were up more than 8% to $31.65 in recent trade.

Continue Reading Below

T-Mobile took over MetroPCS in 2013 and soon after entered 15 new geographic markets. It has so far transitioned 53% of MetroPCS customers to the T-Mobile network. It is attributing both that, its modernization and “un-carrier” strategy for a record low branded postpaid churn rate of 1.5%.

For the full year, it expects to grow branded postpaid net additions by another 2.8 million to 3.3 million.

"A year ago I promised that we would bring change to what I called this arrogant US wireless industry," said T-Mobile CEO John Legere, who has called on rivals Verizon (VZ) and AT&T (T) to adopt similar practices. “We are delivering on that promise and our results reflect the growing customer revolution that we’ve ignited," he said.

What do you think?

Click the button below to comment on this article.