Bellevue, Washington-based T-Mobile US Inc. reported strong results for the first quarter of its fiscal year. The company reported net income of $479 million, or 56 cents per share, for the first quarter, compared with a loss of $63 million, or 9 cents per share, in the same quarter a year earlier. Analysts’ expected 10 cents per share. T-Mobile also reported that revenue rose 10.6 percent to $8.6 billion. Analysts on average had expected revenue of $8.43 billion, according to Thomson Reuters I/B/E/S.
The company’s increased profit was driven by customer gains. T-Mobile’s competitively priced plans and free video streaming options led to the addition of over 1 million new monthly subscribers for the seventh consecutive quarter. The company reported adding 2.2 million customers on a net basis in the first quarter ended March 31. Analysts, on average, estimated an increase of 1.72 million customers, according to research firm FactSet StreetAccount.
The carrier reported robust growth across all of its operating segments for the quarter, which was its strongest quarter over the past year. T-Mobile’s postpaid “phone” connections hit 877,000 net connections for the quarter, while postpaid “mobile broadband” connections reached 164,000 net additions. T-Mobile also reported 807,000 prepaid net connections for the quarter, considerably higher than the 73,000 net additions posted last year. The carrier said it ended the quarter with 65.5 million total connections on its network.
T-Mobile raised its 2016 forecast for customer additions during its earnings report. The company now says it expects to add 3.2 million to 3.6 million postpaid customers on a net basis in 2016. Its previous forecast was for 2.4 million to 3.4 million postpaid customers. The company lost 1.33 percent of its postpaid users in the most recent quarter, up slightly from 1.3 percent a year ago.
The rollout of popular consumer-friendly offers and social media campaigns over the past three years have helped T-Mobile gain market share against rivals Verizon Communications Inc., AT&T Inc., and Sprint Corp. In recent months, the company has launched data-only plans, new family price offers and free music and video streaming services.
T-Mobile is now focusing on enhancing its network capacity. The company plans to spend about $10 billion in the U.S. government’s auction of low-frequency spectrum, or airwaves, which began in March. The company is also looking at adding new retail locations across the country.