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Investing.com -- T-Mobile US Inc (NASDAQ:TMUS) delivered a record-setting second quarter, beating Wall Street estimates on earnings and revenue while raising its full-year guidance.
The results drove shares more than 5% higher in premarket trading Thursday.
The Bellevue-based company reported adjusted earnings per share of $2.84, surpassing the consensus estimate of $2.68. Total (EPA:TTEF) revenue climbed 6.9% year-over-year to $21.13 billion, supported by robust service growth and surge in postpaid additions.
T-Mobile added 1.7 million postpaid customers during the quarter, its best-ever second quarter result, including 830,000 postpaid phone net additions, which was also a record. The company’s 5G broadband business continued to expand rapidly, adding 454,000 customers, a 12% annual increase.
“T-Mobile crushed our own growth records with the best-ever total postpaid and postpaid phone nets in a Q2 in our history,” said CEO Mike Sievert. “When you combine that with the incredible value that we have always been famous for, it should surprise no one that customers are switching to the Un-carrier at a record pace.”
Service revenues rose 6% to $17.4 billion, while postpaid service revenues increased 9% to $14.1 billion, both leading the industry. Net income expanded 10% year-over-year to $3.2 billion, the company’s highest ever for a single quarter.
The strong financial performance prompted T-Mobile to raise its 2025 guidance, projecting postpaid customer additions between 6.1 million and 6.4 million, up from the previous range of 5.5 million to 6.0 million. Core Adjusted EBITDA is expected to reach as high as $33.7 billion, a modest increase from earlier projections.
Despite the strong quarter, KeyBan Capital Markets reiterated its Underweight rating on T-Mobile shares.
"In our view, TMUS remains at a competitive disadvantage structurally given its lack of fiber. In addition, while postpaid phone net adds were strong, TMUS ceded ground in terms of SOGA vs. peers, which is likely peaking given converging pricing and creates a cyclical challenge," they wrote.
T-Mobile also returned $3.5 billion to shareholders in the quarter, including $2.5 billion in share repurchases and nearly $1 billion in dividends. The company has delivered $38.3 billion in total shareholder capital returns since launching its repurchase program in 2022.
Sievert emphasized the strategic advantage of the company’s network and value offerings. “T-Mobile is now America’s Best Network,” he declared. “These durable advantages enabled us to once again translate customer growth into financial growth, with the industry’s best service revenue growth by a wide mile and record Q2 Adjusted Free Cash Flow.”