T-Mobile U.S. Inc posted revenue and profit that was lower than had been expected as the initiatives at the company like plans that were lower priced to attract more monthly users from other competitors took their toll on its earnings.
The No. 3 wireless carrier in the U.S. saw its shares drop 3.4% in early trading. The stock has increased in 2015 by 54%.
The branded postpaid revenue for T-Mobile per each user was down to $47.99 for the third quarter that ended on September 30. Net additions to customers were flat at just over 2.3%.
T-Mobile revamped its pricing plans to make them less expensive, increased the data allotments and introduced a trade-in of $5 for the Apple iPhone 6.
It added as well perks like free music streaming as an attempt to attract customers from the bigger rivals AT&T and Verizon Communications.
On Tuesday, T-Mobile raised its guidance for 2015 for its net additions for a third time. It said it is now expecting to add between 3.8 million and 4.2 million postpaid users, which are customers who pay each month based upon usage, which is up from its prior estimate of between 3.4 million and 3.9 million.
The company announced it expects positive earnings moving forward and reported a free cash flow of $411 billion for the quarter.
For the first time it generated a free cash flow as it added postpaid subscribers that any of the other competitors in the wireless industry.
T-Mobile reported $138 million in net income equal to 15 cents a share, for its third quarter in comparison to a $94 million loss equal to 12 cents a share last year during the same time. Analysts were expecting a 30 cents a share profit.
Revenue was up 6.8% to just over $7.85 billion but did not meet estimates of analysts of $8.29 billion.