T-Mobile beats quarterly phone subscriber estimates

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© Reuters. A T-Mobile shop is pictured in San Ysidro© Reuters. A T-Mobile shop is pictured in San Ysidro

(Reuters) – T-Mobile US Inc (O:) on Monday beat analysts’ third-quarter estimates for net new phone subscribers who pay a monthly bill, boosted by competitive wireless plans aimed at fending off its bigger rivals.

The third-largest U.S. wireless carrier by subscribers said it added 754,000 phone subscribers on a net basis in the three months ended Sept. 30, compared with 774,000 additions a year earlier.

Analysts had expected 742,600 new subscribers, according to research firm FactSet.

Investors pay close attention to postpaid customers, or those with a recurring bill, because they are more valuable to carriers and tend to remain with the company longer than prepaid users.

T-Mobile faces a state attorneys general lawsuit, led by New York and California, as it works to buy Sprint Corp (N:) and achieve more scale to compete with larger operators such as Verizon Communications Inc (N:) and AT&T Inc (N:).

While T-Mobile and Sprint have been locked in a lengthy merger process, Verizon and AT&T beat Wall Street estimates for net new phone subscribers.

Bellevue, Washington-based T-Mobile said it expects pre-close merger-related costs to be $125 million to $150 million before taxes in the fourth quarter.

The company said it now expected adjusted core earning target for 2019 of $13.1 to $13.3 billion, up at the midpoint from prior guidance of $12.9 to $13.3 billion.

T-Mobile’s third-quarter net income rose to $870 million, or $1.01 per share, from $795 million, or 93 cents per share, a year earlier. Analysts had expected earnings of $1.01 per share, according to IBES data from Refinitiv.

Revenue rose 2% to $11.06 billion, missing estimates of $11.33 billion.

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