T-Mobile’s profit surprises market on top of subscriber growth

Add profits to the list of accomplishments for T-Mobile US in the second quarter.

The rival of Sprint already had said in a preliminary report that it added 2.1 million subscribers, which could move it ahead of Sprint as the No. 3 wireless carrier in the U.S.

Thursday’s official report showed T-Mobile earned $361 million, or 42 cents a share. The profit far exceeded the 14-cent average of predictions compiled by Bloomberg. T-Mobile stock rose nearly 5 percent, closing at $38.86.

Sales rose 14 percent to $8.2 billion in the quarter, more than the $7.96 billion expected, and the average customer bill rose 3.8 percent to $48.19.

T-Mobile also increased its outlook for 2015 subscriber additions to a range of 3.4 million to 3.9 million.

The combination of customer growth and financial return impressed analyst Craig Moffett at MoffettNathanson Research.

“Just as we had hoped, T-Mobile is now delivering both. With T-Mobile’s blowout subscriber growth having already been reported for Q2 (the second quarter), profitability was all that was left to learn today … and investors will surely view today’s report as very good news indeed,” he wrote in a note to clients.

At Wells Fargo Securities, analyst Jennifer Fritzsche similarly noted the subscriber gains and financial improvements.

“Give credit where due … very solid quarter,” she said in her note to clients.

The market’s attention turns next to Sprint, which announces its latest results Tuesday. So far, the Overland Park-based wireless carrier has offered no indication of what to expect.

T-Mobile’s new subscriber count is 58.9 million. Sprint had 57.1 million at the end of the first quarter and will update that in its earnings report. Verizon and AT&T each have more than 100 million customers.

This story was originally published July 30, 2015 at 9:59 AM with the headline "T-Mobile’s profit surprises market on top of subscriber growth."