T-Mobile U.S. reported on Wednesday after the closing bell its second quarter fiscal 2017 earnings results. The telecommunications company even exceeded analysts’ expectations, including the Wall Street.
Low Customer Attrition
The third U.S. wireless carrier said it gained an addition of 1.3 million new customers during the second quarter. It helped the company for the most part since there have been 786,000 new phone subscribers on a post-paid basis who pay every month end.
Second Quarter Earnings Doubled
Last year, the earnings of T-Mobile was reported to be $225 million or 25 cents per share, however, this year seems to be just a lucky year for the wireless network operator. This year the company’s second-quarter earnings doubled to $581 million or 67 cents per share. Even its revenue grew to $10.21 billion from its previous of $9.29 billion.
Before the releasing of the earnings result, analysts forecasted earnings of 38 cents on revenue of $9.81 billion.
John Legere, CEO of T-Mobile, said in a statement, “There’s no magic behind T-Mobile’s quarterly results, crediting the beat to investments in the network and good, old-fashioned focus from engineers. This was a competitive quarter. It was the first full quarter with all the unlimited plan on the market.”
T-Mobile Stock on the Rise
The stock of T-Mobile increased by 0.9% and traded today at $61.97. Its CEO, Legere, continues to seek for innovative means to win against forceful rivals like Verizon and AT&T. The present status of the wireless network operator is backed up by growing cash flows, improved network and rising profit margins. There are analysts, who also think that the company has formed itself into an acquisition target as there are rumors of potential merging with Sprint Corporation, another company that provides both wireless and internet services.
However, T-Mobile confirmed that it was open to considering diverse strategic options and is also interested in merging with its competitor, Sprint. Unfortunately, the latter is into exploring other partnerships. There are also reports claiming that Warren Buffett’s Berkshire Hathaway Inc. and Liberty Media Corp. of John Malone are considering making an investment in Sprint that would cost $10 billion to $20 billion.
Fierce Market Competition
Mobile carriers are in a stiff competition since last year since customers have been demanding for unlimited data plans and to end contract lock-in periods. Moreover, the introduction of faster internet speeds plus the impending 5G-compatible phone chips would even step up the rate of competition among wireless providers.
Even the Wall Street is appreciating the ability of T-Mobile to carry out its objectives of giving inexpensive wireless network access without giving up quality. The company has both individual and business customers that further boosts up its growth. Moreover, given the subscriber growth momentum of T-Mobile plus its plans on the upcoming 5G LTE the T-Mobile stock has a lot of potential in the market. Letting go of such stock would be a huge mistake. For 14 straight quarters, the company has been consistently outperforming its rivals when it comes to subscriber growth.
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