Key Takeaways
- T-Mobile shares fell 4.2% in premarket trading to $183 following a Q2 revenue disappointment
- Quarterly revenue climbed 7.9% year-over-year to $22.8 billion, falling short of the $22.9 billion Wall Street forecast
- Earnings per share of $2.99 on an adjusted basis significantly exceeded the $2.54 consensus expectation
- Postpaid net subscriber additions reached 277,000, modestly topping the 268,300 Street projection
- The wireless carrier boosted its full-year adjusted free cash flow outlook to $18.4ā$18.8 billion from $18.1ā$18.7 billion
Shares of T-Mobile tumbled approximately 4.2% during Thursday’s premarket session, trading at $183, as the telecommunications giant delivered second-quarter revenue that missed Wall Street’s expectations despite surpassing profit forecasts.
The company reported quarterly revenue of $22.8 billion, representing a 7.9% increase from the same period last year, though falling marginally below the consensus estimate of $22.9 billion. On the bottom line, adjusted earnings per share of $2.99 handily surpassed analyst projections of $2.54.
The slight revenue shortfall proved sufficient to weigh on the stock price. Not even a substantial earnings outperformance could counterbalance investor disappointment over the top-line figure.
Service revenue expanded 9% from the prior-year quarter to reach $19.0 billion. Within that segment, postpaid service revenue jumped 13% to $15.9 billion.
Core adjusted EBITDA increased 12% year-over-year, landing at $9.5 billion. On a free cash flow basis, the company generated $4.8 billion on an adjusted basis, marking a 4% uptick.
The carrier brought in 277,000 net postpaid account additions during the three-month period. While this represented a 13% decline compared to the year-ago quarter, it managed to slightly exceed Wall Street’s projection of 268,300 additions.
Postpaid average revenue per account increased 2% year-over-year to $152.91. This reflects a gradual but consistent improvement in customer monetization.
Updated Forward Outlook
T-Mobile elevated its full-year adjusted free cash flow projection to a range of $18.4ā$18.8 billion, representing an increase from the previous guidance of $18.1ā$18.7 billion.
The company also lifted its net cash from operating activities forecast to $28.4ā$28.8 billion, compared to the earlier range of $28.1ā$28.7 billion.
Management emphasized that the revised guidance does not incorporate any significant net cash inflows from securitization activities.
T-Mobile maintained its full-year expectations for postpaid net account additions between 950,000 and 1.05 million, along with core adjusted EBITDA in the $37.1ā$37.5 billion range.
The carrier’s capital expenditure forecast remains unchanged at roughly $10 billion for fiscal 2024.
Performance Among Major U.S. Carriers
T-Mobile represents the second of America’s three leading wireless providers to announce quarterly results this earnings season. AT&T similarly exceeded earnings expectations while coming up short on revenue.
Verizon is scheduled to release its earnings report before the opening bell on Friday.
T-Mobile confirmed its full-year postpaid account addition guidance range of 950,000 to 1.05 million, maintaining confidence in its subscriber growth trajectory.
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