On Thursday, T-Mobile (TMUS) reported a quarterly loss, but also a huge increase in subscribers. Investors liked the news, sending TMUS shares up more than 9% in morning trading.
TMUS stock rose after the nation’s fourth-largest wireless carrier said it attracted 1.3 million new monthly subscribers during the first quarter. That exceeded the 1.16 million new subscribers added by the top two U.S. carriers — Verizon (VZ) and AT&T (T) — together, and also beat Wall Street’s estimate of 998,000 new TMUS subscribers, Bloomberg noted.
The quarterly subscriber jump led TMUS to increase its forecast for new subscribers to between 2.8 million and 3.3 million for this year, up from earlier estimates of between 2 million and 3 million new TMUS subscribers. By contrast, Sprint (S), which has announced its intention to merge with T-Mobile, reported a decline in subscribers during the quarter.
Attracting new subscribers through cheaper wireless plans and promotions took a toll on TMUS earnings. T-Mobile posted a loss of $151 million during the first quarter, compared to a profit of $107 million in the prior-year period. It’s margin on wireless services fell to 20%, down from 29% in the year-ago period. EBITDA during the quarter dropped 26% year-over-year to $1.06 billion.
TMUS now estimates full-year EBITDA to range between $5.6 billion and $5.8 billion, down from earlier estimates that suggested a high of $6 billion.
T-Mobile stock closed at $29.29 per share on Wednesday.
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