T-Mobile Q4 results may have been flat in terms of customer growth, but robust financial performance showed promise
T-Mobile US traded in flat year-over-year customer growth for more robust operating metrics during the final three months of 2015. The carrier, which released preliminary Q4 numbers last month, showed stronger financial performance and continued strength against rivals.
Financially, T-Mobile US reported just over $8.2 billion in revenues for Q4 2015, which was an increase of $100 million compared with Q4 2014. Revenues were boosted by a larger customer base as well as increased spending per user across most metrics.
T-Mobile US also managed to cut overall spending, which dipped from $7.7 billion in Q4 2014, to $7.4 billion in 2015. The drop helped to nearly double operating income from $433 million in Q4 2014, to $838 million last year. Removing additional expenses, net income attributed to shareholders nearly tripled from $101 million in 2014, a return of 12 cents per share, to $297 million last year, or a return of 34 cents per share.
The carrier’s drop in spending did not come from network investments, with cash capital expense related to property and equipment increasing from $1.3 billion in Q4 2014, to more than $1.4 billion in 2015. Full-year capex also increased from $4.3 billion spent in 2014, to more than $4.7 billion spent last year.
T-Mobile US also reported it had recently entered into agreements to acquire 700 MHz spectrum licenses covering 48 million potential customers, pushing its total 700 MHz spectrum coverage to 258 million pops. The carrier noted its LTE network currently covered 305 million pops.
While customer growth was down slightly compared with Q4 2014, T-Mobile US managed to improve customer churn, which on the postpaid side dropped from 1.73% to 1.46%, and on the prepaid side slid from 5.39% to 4.2% during the quarter. The numbers do, however, indicate T-Mobile US’ gross customer additions soured a bit year-over-year, though its ability to maintain its own customers was a boon for financial operations.
Beyond the churn improvements, T-Mobile US said it remained net positive in terms of porting ratios against its nationwide rivals in Q4, posting a 1.92-to-1 porting ratio with AT&T Mobility, 1.56-to-1 porting ratio with Sprint and a 1.44-to-1 porting ratio with Verizon Wireless.
Investors appeared pleased with T-Mobile US performance, with the carrier’s stock (TMUS) trading up early Wednesday in a generally positive market.
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