T-Mobile Raises Subscriber-Growth Outlook

T-Mobile US Inc. on Thursday lifted its subscriber-growth outlook for the year as the company logged a better-than-expected 14% increase in revenue for its second quarter.

T-Mobile said it is now targeting total branded mainstream additions of 3.4 million to 3.9 million, up from its previous guidance of three million to 3.5 million.

T-Mobile has courted new subscribers with aggressive pricing, a move that has weighed on its profit margins. That has allowed it to add customers in its fight for subscribers with rival Sprint Corp. and the two largest U.S. carriers, Verizon Communications Inc. and AT&T Inc.

T-Mobile said earlier this month that it would drop all additional charges for calls and texts to and from Mexico and Canada, its latest move to tempt subscribers.

For the second quarter, the company reported a profit of $361 million, or 42 cents a share, down from a profit of $391 million, or 48 cents a share, a year earlier. The prior-year period included a gain from a spectrum transaction with Verizon Communications Inc.

Revenue grew 14% to $8.2 billion.

Analysts polled by Thomson Reuters had projected a per-share loss of 18 cents and revenue of $7.94 billion.

The company's branded postpaid phone churn, or monthly service cancellations, fell by 16 percentage points to 1.3%.

Earlier this month, T-Mobile reported that it had added 760,000 mainstream phone subscribers in the second quarter, compared with AT&T Inc.'s loss of more than 300,000. The inflow of customers hurts short-term profits, but analysts say that relatively low service cancellations means the customers should prove valuable over the longer term.

Overall, T-Mobile brought its total number of customers up to 58.9 million for the quarter ended June 30.

Write to Chelsey Dulaney at [e-mail]

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