By Lucia Maffei
T-Mobile US, Inc., helped by continued acquisition of new customers, said fourth quarter earnings almost tripled, substantially exceeding analysts’ expectations.
In the latest quarter, the Bellevue, Wash.-based national wireless carrier posted net income attributable to common stockholders of $283 million, or 34 cents a diluted share, up 180 percent from $101 million, or 12 cents per share in the year-ago quarter.
The big jump in profit came on a modest increase in revenue. Fourth-quarter sales increased 1.1 percent to $8.25 billion from $8.15 billion a year ago.
The company said that postpaid net customers – a key unit of growth in the telecom sector – grew by a solid 1.29 million in the fourth quarter of 2015, compared to 1.09 million in the third quarter of 2015 and 1.28 million in the comparable quarter of 2014.
Total Postpaid Net Customer Additions (in millions)
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“Our customer growth is translating into strong financial growth,” Chief Financial Officer J. Braxton Carter said during the conference call.
T-Mobile’s earnings surpassed by a hefty 19 cents the 15 cents a share that analysts surveyed by Yahoo Finance had been expecting.
“Our results show that the business is firing on all cylinders,” said President and CEO John Legere in a press release. He added: “We successfully balanced customer growth with profitability.”
Legere, known for his brashness, also manifested his enthusiasm by writing on Twitter “While the carriers have been creating crazy promotions, T-Mobile has held strong and has been taking their customers,” ending his tweet with the hashtag #sorrynotsorry.
The company is reaping the rewards of two promotions launched in 2015: Data Stash and Binge On, which let eligible users, respectively, roll the extra unused 4G LTE data into the next month and stream unlimited video on Netflix without using high-speed data.
“The firm has done a remarkable job of turning around its fortunes over the past two years, introducing a cohesive brand strategy around relatively unique rate plans,” Michael Hodel, strategist at Morningstar, Inc. wrote in a February report written before the earnings release.
Specifically, the launch of a new branding campaign around the “uncarrier” designation and the creation of rate plans that separate service and phone pricing have produced “solid results,” Hodel concluded in that earlier report.
The company also said that its 4G LTE network now covers 305 million people, up from 300 million reported in the third quarter of 2015 and 265 million reported at the end of the fourth quarter of 2014.
Referring to the overall performance of the company, Legere offered some confident words about the future: “This success allows us to invest in things that will fuel more growth in the future, like our network, spectrum, additional on carrier moves and customer care.”
For all of 2015, T-Mobile posted net income attributable to common stockholders of $678 million, or 82 cents per diluted share, up 174.5 percent from $274, or 30 cents per share in the 2014 comparable period. Revenues increased 8.4 percent to $32.05 billion from $29.56 billion the year before.
In Nasdaq trading Wednesday, T-Mobile shares closed up 40 cents at $36.85, or up 1.10 percent.
