T-Mobile dips after revenue miss, but a beat-and-raise on customer growth
Joe Raedle
T-Mobile stock (NASDAQ:TMUS) dipped 1.3% after hours Thursday following a second-quarter earnings report where revenues declined and missed expectations, but the company beat profitability forecasts and logged its best second-quarter customer adds in eight years.
Revenues overall fell 2.5% to $19.2B, missing forecasts. Service revenues, grew 3% to $15.7B, while postpaid service revenues rose 5% to $12.1B.
And the company swung to a profit of $2.2B. Core adjusted earnings before interest, taxes, depreciation and amortization rose 11% to $7.3B.
In operations, net additions were once again industry-best. Postpaid net account additions came in at 299,000 (down 81,000 year-over-year); postpaid net customer additions were 760,000 (down by 95,000). The company added 760,000 postpaid phone net customers; that was up by 37,000 year-over-year, driven by gross adds and churn improvement.
That postpaid phone churn dropped to a record-low 0.77%, vs. 0.79% at AT&T and 0.83% at Verizon.
Net cash from operations rose 3% to $4.4B (including cash payments for merger-related costs of $728M), and adjusted free cash flow rose 64% to $2.9B.
The company boosted 2023 guidance in several areas -- notably in postpaid net customer adds, now seen at 5.6M-5.9M, up from a previous 5.3M-5.7M. T-Mobile (TMUS) also narrowed its expectations higher for core adjusted EBITDA (excluding lease revenues), which it now sees at $28.9B-$29.2B.
It now expects merger synergies of $7.5B, up from a previous $7.3B-$7.5B. And it's forecasting operating cash flow of $18B-$18.3B, and adjusted free cash flow of $13.2B-$13.6B.

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