T-Mobile blows away Wall Street's Q4 earnings estimate by 50%; carrier's shares respond
From October through December, T-Mobile scored a net profit of $390 million, or 45 cents a share. That is a 32% hike from last year's fourth quarter profit of 34 cents a share, or $297 million. Fourth quarter revenue grew 23.4% to $10.18 billion for the period. Considering that Wall Street was expecting T-Mobile to report profits of 30 cents a share, it appears that T-Mobile topped expectations by a whopping 50%. Revenue also topped Wall Street estimates of $9.84 billion. For the quarter, T-Mobile added 2.1 million net new subscribers
The nation's third largest carrier had a strong fourth quarter as it reported 933,000 postpaid phone subscribers, the Holy Grail for wireless carriers. Postpaid phone churn for the quarter declined by 18 basis points year-over-year to 1.28% from 1.46%. For all of 2017, T-Mobile says that it will add 2.4 million to 3.4 million net branded postpaid subscribers. T-Mobile's own estimate for 2017 might be disappointing according to institutional trading house Jefferies, but it adds that T-Mobile is known to be conservative with its own forecasts. Jefferies analysts said that they don't believe that the restrained forecast for 2017 is due to competition from the just launched Verizon Unlimited plan.
For all of 2016, T-Mobile added 8.2 million net new subscribers. Of that amount, 3.3 million were postpaid phone accounts that were added last year. The carrier currently covers 314 million people with its 4G LTE network. By year end, that figure will be up to 320 million.
Investors seem to like what they hear. T-Mobile shares are up $1.10 or 1.81% to $62 in early Wall Street trading today.