T-Mobile US Inc.
TMUS -0.15%
said its cost and customer trends had improved heading into the end of 2022 after the company logged its strongest jump in core phone subscriptions since its merger with Sprint Corp.
The cellphone carrier reported a net gain of 854,000 postpaid phone connections during the recent quarter, a postmerger record that outpaced both
AT&T Inc.
and
Verizon Communications Inc.
The tally topped the average estimate of 725,000 from analysts polled by FactSet.
The shares of T-Mobile climbed 3.2% to $145.06 in Thursday’s after-hours trading.
T-Mobile said total net customer additions under postpaid plans would hit 6.2 million to 6.4 million for the year, up from its earlier 6 million to 6.3 million target. The positive projections represented T-Mobile’s third target increase this year.
AT&T added 708,000 such customers and raised its projected full-year profit, a sign its customers were still willing to spend heavily on new smartphones with expensive data plans. Verizon, the largest of the three U.S. wireless network operators, posted an 8,000-phone increase in the category.
T-Mobile’s customer gains have led the wireless industry for most of the past two years. The Sprint merger helped the combined company cut its construction and tower-leasing costs and led to widespread layoffs over the past two years.
T-Mobile now expects savings and benefits from its 2020 purchase of Sprint to reach between $5.7 billion and $5.8 billion this year, up from its earlier $5.4 billion to $5.6 billion target.
T-Mobile’s overall profit fell to $508 million, or 40 cents a share, from $691 million a year earlier, or 55 cents. The earnings result included $972 million of merger-related costs and an expected $803 million loss from the sale of the company’s wireline network to
Cogent Communications Holdings Inc.
for $1.
Total revenue slipped 0.7% to $19.48 billion despite higher revenue from wireless service. Finance chief
Peter Osvaldik
said the decline reflected dwindling leased-smartphone plans under Sprint accounts, which generate sales but don’t contribute to the service revenue that powers company profits.
The company’s profile has steadily improved since it competed in a wireless market of four major players several years ago. The Sprint purchase vaulted the company into the No. 2 spot in terms of subscribers and recently pushed its market capitalization above AT&T and Verizon.
T-Mobile’s improving finances earned it investment-grade ratings from the top three debt-ratings services this year and allowed the board to authorize up to $14 billion of stock buybacks through next September.
Write to Drew FitzGerald at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
For all the latest Technology News Click Here
For the latest news and updates, follow us on Google News.
