Yahoo Finance T-Mobile Ups Guidance as Profit, Subscribers Beat Estimates
(Bloomberg) -- T-Mobile US Inc. posted third-quarter profits that beat estimates, buoyed by better-than-expected mobile customer gains. It’s the last of the Big Three wireless carrier to report strong results, a positive sign for the telecommunications industry, which has been struggling to boost subscriber growth in recent years.
Most Read from Bloomberg
Israel Latest: Netanyahu Defies Calls to Quit, UN Warns on Syria
Innovent, Lilly Obesity Drug Spurs More Weight Loss in Trial
Saudi Forces on High Alert After Deadly Clash With Houthi Rebels
The Bellevue, Washington-based company added a net 850,000 postpaid mobile phone customers in the quarter ending Sept. 30, the company said Wednesday, beating analysts’ estimates of 780,400. In June, T-Mobile reported adding 760,000 mobile phone customers in what it said was its best second quarter in eight years.
Shares rose 1.3% at 9:49 a.m. in New York.
Adjusted earnings were $1.82 per share, compared to the average analyst estimate compiled by Bloomberg of $1.69 per share. Third-quarter revenue was $19.3 billion, in line with analysts’ estimates. Shares rose 1.6% at 7 a.m. in early trading in New York.
T-Mobile, along with rivals Verizon Communications Inc. and AT&T Inc., has seen a slowdown in mobile-phone subscriber growth as the industry cools from the phone-buying frenzy of the Covid-19 pandemic.
But the No. 2 carrier in the US has bucked the trend by cashing in on its lead in fast 5G airwaves, adding more rural territories to its coverage area and selling wireless internet access where broadband choices are few.
T-Mobile said its fast 5G service has expanded to cover 300 million people in the US, doing so more than two months ahead of its expected schedule.
“We announced this goal nearly three years ago, and then we got to work and got it done,” Chief Executive Officer Mike Sievert told investors Wednesday. “To this day, no one else in our industry has stated any plans to match it.”
T-Mobile turned in “a solid performance that may be attributed to its 5G lead and strong brand in an increasingly competitive market,” Bloomberg Intelligence senior analyst John Butler said in a note, adding that it led the industry in net phone additions.
The company raised its free cash flow guidance for the year to $13.4 billion to $13.6 billion, up from its previous guidance of $13.2 billion to $13.6 billion.
T-Mobile’s results “reflect a stabilizing wireless competitive backdrop,” Citigroup Inc. analysts led by Michael Rollins wrote in a note. “Within this context, T-Mobile retains opportunities to grow service revenues at or better than the industry, expand margins and improve financial flexibility to return capital to shareholders at an elevated pace.”
As mobile phone growth slows, T-Mobile has also been working to expand its fixed wireless broadband base. It added 557,000 wireless home internet customers, more than the 486,700 analysts predicted. The company has said its target is 7 million to 8 million subscribers by 2025.
Competition for internet offerings is fierce, as cable companies such as Comcast Corp. and Charter Communications Inc. fight back with promotions offering a free mobile line for broadband customers.
In September, T-Mobile said it would buy airwaves from Comcast for $1.2 billion to $3.3 billion. The spectrum would help provide more service to parts of New York City; Orlando; Kansas City, Missouri, and other cities.
Also in September, Bloomberg News reported that T-Mobile was in discussions with a unit of Tillman Global Holdings LLC to build out a fiber-optic network, setting the stage for the wireless carrier to enter the landline broadband business.
(Updates with shares in third paragraph, comments from CEO, analysts beginning in seventh paragraph)
Most Read from Bloomberg Businessweek
America’s Culture Wars Have Liberal Parents Opting for Home-Schooling
Sam Bankman-Fried Takes Stand in Reminder of Crypto’s Epic Fall
The Business of Children’s Books in This New Era of Book Banning
©2023 Bloomberg L.P.
