Carried by surprisingly strong subscriber growth, Sprint (NYSE:S) posted a lighter-than-expected fourth-quarter loss on Tuesday that sent the wireless provider's shares soaring.
The quarterly results come as Sprint reportedly rethinks a possible acquisition of smaller rival T-Mobile US (NYSE:TMUS) due to public opposition from antitrust officials.
The No. 3 U.S. wireless provider said it lost $1.04 billion, or 26 cents a share, last quarter, compared with a loss of $1.32 billion, or 44 cents a share, a year earlier. Analysts had been modeling for a deeper loss of 33 cents a share.
Revenue increased 1.5% to $9.14 billion, topping the Street’s view of $8.97 billion.
Sprint said it added 682,000 net subscribers during the fourth quarter, blowing away forecasts for a gain of 331,000 customers. The company reported 58,000 postpaid additions, compared with estimates for a loss of 201,000 and a loss of 360,000 in the third quarter.
Prepaid subscribers jumped by 322,000 during the fourth quarter, beating estimates for a gain of 240,000 customers. Sprint said it ended the year with a record 53.9 million Sprint platform subscribers.
Looking ahead, Sprint projected 2014 adjusted earnings before interest, taxes, depreciation and amortization of $6.5 billion to $6.7 billion. By comparison, analysts had been calling for adjusted Ebitda of $6.61 billion.
During a conference call with analysts, Sprint CEO Dan Hesse said consolidation of U.S. mobile players besides AT&T (NYSE:T) and Verizon would be healthy for the industry and better for consumers, Reuters reported. Hesse declined to comment specifically on a potential deal for T-Mobile.
Shares of Overland Park, Kan.-based Sprint rallied 7.15% to $8.24 ahead of Tuesday’s opening bell, setting them up to trim their 2014 loss of almost 30%.