T-Mobile US Inc., in a push to overtake Sprint Corp. as the third-largest U.S. wireless carrier, exceeded analysts’ second-quarter earnings estimates and raised its subscriber growth forecast.
Earnings were 42 cents a share, Bellevue, Washington-based T-Mobile said in a statement Thursday, topping the 14-cent average of predictions compiled by Bloomberg. The stock rose the most in two months.
“The importance of strong user growth remains a key factor,” said Colby Synesael, an analyst with Cowen and Co. in New York. “Investors have shown a desire for the company to find a balance between strong net subscriber additions and profitability.”
T-Mobile added Apple Music earlier this week to the list of streaming services that ride free on its network. The company, which bills itself as the “un-carrier,” has used free music streaming, phone financing, low prices and data giveaways to take customers away from its larger rivals Verizon Communications Inc. and AT&T Inc.
Sales rose 14 percent to $8.2 billion last quarter, also exceeding the $7.96 billion average of estimates.
T-Mobile increased its outlook for 2015 subscriber net additions to 3.4 million to 3.9 million. The average monthly subscriber’s phone bill increased 3.8 percent to $48.19. Analysts predicted $46.46, the average of seven estimates compiled by Bloomberg.
The carrier announced preliminary subscriber results earlier this month, reporting the addition of 2.1 million new customers including 760,000 monthly phone subscribers. The total user count is now 58.9 million. Sprint had 57.1 million users as of March 31 and will update that number when it reports earnings next Wednesday.
Verizon and AT&T each have more than 100 million customers. Verizon lowered it sales growth forecast last week from 4 percent to 3 percent as price cutting takes a toll. AT&T, which acquired DirecTV last week for $48.5 billion to become the largest U.S. pay-TV provider, was able to salvage user gains through tablet promotions.
T-Mobile, about 66 percent owned by Deutsche Telekom AG of Germany, rose 4.9 percent to $38.86 at the close in New York, the biggest increase since May 26. The stock has climbed 44 percent this year, while Sprint slumped 17 percent.
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