T-Mobile quarterly profit up, new subscribers top estimates
T-Mobile US Inc added more subscribers than expected in the first quarter as promotional offers helped the No. 3 wireless carrier win over customers despite rival unlimited data plans, the company said on Monday.
T-Mobile has been gaining share from larger competitors AT&T Inc and Verizon Communications Inc in a saturated U.S. wireless market through network improvements and lower prices.
In February, Verizon offered an unlimited data plan for the first time in over five years, at $80 a month for a single line. In response, AT&T opened up its unlimited plan to all of its wireless customers, and T-Mobile said it would offer a new promotion of two unlimited lines for $100 a month.
T-Mobile's net income rose to $698 million, or 80 cents per share, in the quarter ended March 31, from $479 million, or 56 cents per share, a year earlier.
Excluding items, earnings per share was 48 cents, according to Thomson Reuters calculations.
Total adjusted revenue rose nearly 11 percent to $9.61 billion.Analysts on average were expecting earnings of 35 cents per share on revenue of $9.67 billion, according to Thomson Reuters I/B/E/S.
T-Mobile shares rose 1.1 percent after closing up 1.9 percent at $65.93, before falling to $65.75.
T-Mobile said it added 914,000 branded postpaid subscribers, who pay bills monthly, on a net basis, during the period. Analysts on average had expected net additions of 847,000, according to market research firm FactSet StreetAccount.
Churn, or customer defections, was 1.18 percent, compared with the average analyst estimate of 1.27 percent according to FactSet.
"We're seeing record lows here," T-Mobile Chief Executive John Legere said on the company's post-earnings conference call.
The company also raised its 2017 forecast for branded postpaid net additions to a range of 2.8 million to 3.5 million, from 2.4 million to 3.4 million previously.
(Additional reporting by Aishwarya Venugopal in Bengaluru; Editing by Savio D'Souza and Richard Chang)