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T-Mobile’s profit soared to $297 million in the fourth quarter of 2015, up almost three times the $101 million it posted in Q4 2014, while raising its revenue to $8.25 billion from the $8.20 billion it reported one year ago.
Also highlighting the wireless carrier’s Q4 earnings call on Feb. 17 was 1.3 million new net postpaid customer additions in the quarter, giving T-Mobile 4.5 million total net postpaid customer additions for the full year of 2015.
Earnings for Q4 2015 were 34 cents per share, which was more than twice the 15 cents per share that was expected by a sampling of analysts by Thomson Reuters.
The Q4 profit, or net income, of $297 million was up from $138 million in the third quarter of 2015. For the full-year 2015, net income was $733 million, compared with $247 million in 2014.
“T-Mobile is #1 in postpaid phone growth, #1 in service revenue growth, #1 in Adjusted EBITDA growth, not to mention #1 in customer care and #1 in network speed,” John Legere, president and CEO of T-Mobile, said in a statement. “We set out to change this industry, we’re well on our way and we won’t stop.”
The company reported 2.1 million total net adds in the fourth quarter, including the 1.3 million net postpaid additions, and a total of 8.3 million new combined postpaid, prepaid and wholesale customer additions for the full year of 2015. Postpaid customer churn for Q4 was 1.46 percent, down from 1.73 percent one year ago.
T-Mobile says it now has 63 million customers as of the end of Q4. The quarter was the sixth consecutive one in which T-Mobile reported more than 1 million branded postpaid net customer additions. Branded prepaid net customer additions in the fourth quarter of 2015 totaled 469,000, with a total of 1.3 million for the full year of 2015.
Several IT analysts told eWEEK that T-Mobile’s earnings numbers were good, but at least one analyst wonders whether the company’s growth can continue at these rates.
Charles King, principal analyst at Pund-IT, wrote in an email reply that “to say that T-Mobile’s Q4 and FY2015 earnings were positive is an understatement,” since it beat analysts’ expectations in almost every category, including profitability and acquiring postpaid customers. “Customer growth also outshined rivals, which is no small thing,” he wrote.
Also notable is the success of the company’s BingeOn video streaming service, “especially given the pressure some critics have tried to exert by equating BingeOn with bandwidth throttling,” King wrote. “Given these results, it’s reasonable to say that T-Mobile continues to be ahead of its competitors in understanding and responding to both mobile markets and customers. That should help T-Mobile continue to perform well and to weather challenges in the coming months.”
Bill Menezes, an analyst with Gartner, told eWEEK in an email reply that the strong quarter “reinforces T-Mobile’s strategy of aggressive promotions to gain market share, while expanding the reach of its LTE network to keep the market share it gains.”
Rumors have persisted for quite a while that T-Mobile’s parent, Deutsche Telekom, might be looking to sell the company off, and the latest positive earnings report could bolster those reports again, wrote Menezes. “If T-Mobile’s parent company still wants to sell off its stake, one would think that time is getting closer. The T-Mobile story seems about as strong growth as it has ever been, for any potential buyer.”
Yet despite the positive numbers, Jan Dawson, chief analyst at Jackdaw Research, said he’s a bit cautious about the company’s future.
“[It] looks like revenue growth is slowing down, as is customer growth, while margins are slowly improving,” Dawson wrote in an email reply. “T-Mobile continues to be very focused on postpaid phones, a market in which there’s almost no overall growth, and it’s starting to be apparent that they’re running out of momentum on their Un-Carrier moves.”
With that in mind, some caution is in order, he wrote. “To be clear, the numbers are still pretty good right now, and they’re beating the industry in postpaid phone subscriber growth and so on. But I just question how sustainable it is.”