T-Mobile (TMUS) might be the nation’s third-largest wireless carrier, but it has no competition when it comes to swagger. After crushing Wall Street’s fourth quarter numbers on almost every metric, CEO John Legere touted that for the last three years his company has "taken all of the postpaid phone growth in the industry."
The company’s uncanny ability to lure customers away from Verizon (VZ) and AT&T (T) without punishing its own bottom line suggests that its management could also be in a class of its own. TMUS stock is rising more than 2.5% Tuesday after the company not only reported fourth quarter profit that exceeded analysts’ estimates, its revenue rose more than 24%, driven by 933,000 net post-paid phone subscribers, who pay traditional monthly phone bills, and 541,000 net prepaid accounts.
In the three months that ended December, The Bellevue, Wash.-based reported net income of $390 million, or 45 cents per share, which crushed by Wall Street forecast of 28 cents per share. T-Mobile’s revenue hit $10.18 billion in the quarter, which grew 23% year over year, topping last year’s mark of $8.25 billion and above consensus estimates of $9.86 billion. The company said it added a total 2.1 million customers in the fourth quarter.
“The competition just doesn’t get that customers want to come first! That’s three years in a row that we’ve added more than 8 million customers and taken all of the postpaid phone growth in the industry,” said Legere. “The Un-carrier revolution continues in 2017.”
The fourth quarter has been a busy one for T-Mobile in terms of promotions. The company has rolled out several new initiatives designed to steal share from its rivals. Ahead of the quarter analysts were hesitant to raise price targets, waiting to see the extent to which these promotion would resonate with consumers. T-Mobile’s offering included free video-streaming promotions like Binge On and unlimited data plans to families.
There were concerns that T-Mobile’s aggressive pricing would impact profits. But with a 17-cent beat on EPS, which showed margins remained strong, those fears should now be erased. And T-Mobile shows no signs of slowing down. In 2017, T-Mobile said it expects to add between 2.4 million and 3.4 million post paid customers, presumably at the expense of Verizon and AT&T, the No. 1 and No. 2 U.S. wireless carriers. In short, despite TMUS stock surging some 73% overt the past year, there are tons of reasons to remain dialed in.