WAYNESBORO, Va. (AP) -- Shares of Ntelos Holdings Corp. rose Monday after the regional cellphone company said that it added new customers in its first quarter and cut down in subscriber turnover, even as net income fell from last year.
The first-quarter results widely beat Wall Street expectations.
Earlier this month, Ntelos Holdings announced it would be selling the popular iPhone at a discounted price of $150, which is well below what many carriers are charging for Apple Inc.'s smartphone. Ntelos is just the fifth U.S. phone company to get the iPhone.
Ntelos CEO James Hyde said Monday that the company expects to boost its profits as it sells more iPhones and other smartphones, in part because customers who buy those phones tend to have better credit.
The proportion of Ntelos's customers who own smartphones rose sharply during the first quarter compared to the end of 2011, a trend that Hyde said should continue.
"We are just beginning to hit our stride in terms of smartphone penetration," Hyde said during a conference call with analysts Monday.
On Monday, Ntelos said that it was luring new subscribers in the quarter that ended just days before it announced its plans for the iPhone. The company said that during the first quarter, it added 6,800 subscribers in the first quarter, compared to a net loss of 2,900 in the prior year period. It ended the period with 421,300 customers at March 31.
At the same time, subscriber "churn," or turnover, during the quarter was 3.1 percent, compared to 3.5 percent in the same period last year.
During the quarter ended March 31, Ntelos earned $7.9 million, or 37 cents per share, which was down from $10.8 million, or 51 cents per share, in the same period a year before.
Analysts were expecting net income of 28 cents per share, according to a survey by FactSet.
Revenue during the quarter was $110.5 million, up from $104.9 million in the prior year period. That beat analyst expectations for revenue of $108.1 million.
The company said income fell even as revenue rose in part because costs were higher. Total operating costs were $91.7 million, up from $86.7 million in the prior-year period.
Hyde said the first quarter was the first time in two years that the company's retail operations added subscribers while its retail subscriber service revenue showed an increase from the previous quarter.
He said the company expects its adjusted net income before taxes, interest and other charges to be between $130 million and $138 million this year.
Shares rose $1.68, or 9 percent to $20.35 in midday trading. The stock is still close to its year-low of $18.53 per share.