T-Mobile (NASDAQ:TMUS) Posts 46% Increase in Q1 Profit, Adds 1.1 Million Subscribers


T-Mobile US Inc. (NASDAQ:TMUS) demonstrated stellar growth in the first quarter as it added an industry-leading 1.1 million subscribers, while also posting year-on-year increases in net income and revenues during the period.

The company, which in February began offering unlimited data plans, has now made it four consecutive years of adding over a million customers every quarter.

During the three-month period, the company added 798,000 branded postpaid phone customers and expects to seize more than 250% of the industry’s postpaid phone growth.

Branded prepaid net additions came in at 386,000, buoyed by a successful MetroPCS brand.

Solid Results

T-Mobile reported net income of $698 million and earnings per share of 80 cents, representing increases of 46% and 43%, respectively, on a yearly basis.

Analysts expected the company to post EPS of 48 cents, according to Thomson Reuters estimates.

Excluding certain tax gains and benefits, net income and EPS rose by $332 million and 38 cents, respectively.

The wireless carrier also posted an 11% year-on-year increase in first-quarter service revenues, to $7.3 billion. According to an April 24 release, this is expected to mark the 12th straight quarter that the company has led the industry in service revenue percentage growth.

Capital expenditures grew to $1.5 billion in the period, up 14% year over year, while free cash flow rose by $495 million to $185 million, from a $310 million outflow in the year-ago quarter.

“We’ve been beating up on the competition for over 4 years now while making wireless better for consumers,” T-Mobile President and CEO John Legere said in the statement.

Game Changer, Strong Outlook

T-Mobile recently agreed to spend $8 billion to acquire an average 31 MhZ of 600 MhZ low-band spectrum covering the entire U.S.

The move, which the company calls a game changer for wireless customers, is expected to strengthen LTE coverage and boost capacity.

For the full year, T-Mobile expects broadband postpaid net customer additions to range from 2.8 million to 3.5 million, up from 2.4 million to 3.4 million previously.

The company also maintained its adjusted EBITDA target of between $10.4 billion and $10.8 billion, including $800 million to $900 million in leasing revenues.

Key Stakeholders

FMR LLC was the largest shareholder of T-Mobile as of the end of 2016, holding 27.9 million shares in the company valued at $1.60 billion.

Another key shareholder is Price T Rowe Associated Inc., which held 27.0 million shares in the company valued at $1.55 billion as of the end of the same period.

T-Mobile shares closed at $65.93, up 1.90%.

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