T-Mobile US Inc. (TMUS), the third-place wireless carrier in the U.S., posted fourth-quarter results Tuesday before the opening bell that were higher than Wall Street’s expectations.
For the quarter, T-Mobile reported revenue of $10.18 billion, which was 23.4% higher than the year-ago fourth quarter. Net income increased to $390 million or $0.45 a share compared to $297 million or $0.34 a share in last year’s fourth quarter. Analysts, according to Thomson Reuters I/B/E/S, had expected T-Mobile to weigh in with earnings of $0.30 a share and revenue of $9.84 billion. T-Mobile said during the three-month period ended Dec. 31, it added 933,000 postpaid phone subscribers, which are more lucrative customers for the wireless carriers because they pay a bill each month and tend to be more loyal. (See also: T-Mobile Reports Q4: Gains Already In the Bag.)
"These results are proof that doing right by customers is also good for shareholders. Not only are customers flocking to T-Mobile, but we're also producing rock-solid financial results including 11% growth in service revenues, 23% in total revenues, 31% in net income and 12% in adjusted EBITDA year-over-year in Q4,” said John Legere, president and CEO of T-Mobile in a press release announcing fourth quarter results.
T-Mobile Added 2.1M Customers
During the fourth quarter, T-Mobile said it had total net customer additions of 2.1 million, bringing the wireless carrier’s total customer count to 71.5 million. The last quarter of the year was the 15th in a row in which T-Mobile added more than 1 million total net customer additions. For the full year, its total net additions were 8.2 million, the third year in a row it added more than 8 million. Looking out into 2017, T-Mobile expects to add between 2.4 and 3.4 million branded postpaid net additions. It’s targeting adjusted EBITDA of between $10.4 and $10.8 billion, which excludes spectrum gains and includes leasing revenues of $0.8 to $0.9 billion.
T-Mobile is known for rolling out trend-setting promotions, and it maintained that reputation during the fourth quarter, rolling out a slew of enticements to lure customers away from its rivals. T-Mobile was the first out of the gate with a free iPhone 7 upgrade program, updated its unlimited plans and got rid of taxes and fees on its plans. Those moves are winning customers and forcing its rivals to respond. The most recent example: on Monday, Verizon Communications Inc. (VZ) rolled out an unlimited plan years after saying it had given them up.