NEW YORK - Wireless service provider Virgin Mobile USA Inc. posted higher-than-expected third-quarter earnings Monday despite adding fewer customers to its rolls than in the same period last year.

The Warren, N.J.-based company said profit rose to US$4.1 million, or 7 cents per share, for the three months that ended Sept. 30, compared with a net loss of US$7.4 million, or 29 cents per share, a year ago. Revenue climbed to US$305 million from US$301 million.

Excluding one-time items, Virgin said it would have earned 8 cents per share. Analysts, who typically exclude one-time items, expected 4 cents per share on US$314.5 million in revenue, according to polling by Thomson Reuters.

The positive results come amid generally bad news for the wireless industry, which has not seen the customary uptick in sales as the holiday season kicks in.

Improved earnings for Virgin could also be a positive signal for the company's business model, which has seen a number of upstarts come and go.

Virgin, the wireless unit of Richard Branson's Virgin Group, is a mobile virtual network operator. Instead of building out its own network, it piggybacks on Sprint Nextel Corp.'s, leasing airtime that it repackages for its roughly 5.2 million customers.

That formula hasn't always worked. Similar companies, including Amp'd Mobile, ESPN Mobile and Disney Mobile, all fizzled.

Tracphone, the largest MVNO with 9.5 million subscribers, focuses mainly on cheap, prepaid plans marketed to low-income consumers.

With its acquisition of Helio, the troubled wireless unit of South Korea's SK Telecom Co, Virgin is taking a different -- and untested -- approach, analysts say.

Helio provides broadband access for higher-end features like Web surfing, video and music.

William Hahn, an analyst with Gartner Inc., said the acquisition could put Virgin in a good position to capitalize on its young customer base.

"The intelligent part of the move was that Virgin recognized that the people who like them are 18 years old and in a few years they're going to be 26 years old and they're going to have jobs," he said. And that should put them in the market for more sophisticated gadgets.

Whether that strategy can convince Wall Street is still an open question.

Virgin's stock has traded at dismal levels since the company went public at US$15 a share last October.

Virgin lost about 3,000 net subscribers, down from a gain of 45,830 in the year-ago quarter. It ended the quarter with about 5.2 million customers. The "churn" rate, or turnover among subscribers, grew to 5.5 percent from 4.9 per cent.

Dan Schulman, Virgin's chief executive, said in an interview that the results were strong given that the company closed its deal to acquire Helio in the quarter.

He said the loss of subscribers came mostly from the new unit, as a result of aggressive cost-cutting.

"I'm reasonably pleased with the third-quarter results," Schulman said. "In just about every one of the key metrics we're seeing an improved trend and some nice growth from a year-over-year perspective."

Virgin shares rose 24 cents, or 25 per cent, to $1.20 in after-hours trading.