T-Mobile US early Wednesday reported June-quarter earnings that missed analyst estimates due to one-time items, while revenue fell short of expectations. But TMUS stock climbed into a buy zone as wireless subscriber additions topped views.
T-Mobile said it added 723,000 postpaid phone subscribers vs. estimates of 575,000. In Q2, AT&T added 813,000 subscribers while Verizon Communications added 12,000.
Postpaid phone subscribers spend the most on wireless services and often sign up for unlimited data plans. They're the most profitable customers.
"Today's results make clear that T-Mobile is still taking share and at an accelerating rate," said Craig Moffett, analyst at MoffettNathanson in a report. "And there are signs that the customers they are attracting are from increasingly affluent demographics. It is AT&T, not T-Mobile (or Verizon), seeing lengthening customer payment cycles."
In the three months ending June 30, T-Mobile reported a second-quarter loss of 9 cents on an adjusted basis amid the integration of Sprint. T-Mobile said impairment expense related to wireline assets and legal-related expenses tied to an August 2021 cyberattack lowered earnings.
The wireless services provider said revenue rose a fraction to $19.70 billion.
TMUS Stock: Wireless Subscriber Additions Top Expectations
Analysts predicted earnings of 26 cents a share on revenue of $20.12 billion. In the year-earlier period, T-Mobile earned 78 cents on revenue of $19.95 billion.
T-Mobile said core adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 10% to $6.6 billion.
TMUS stock jumped 5.2% to close at 140.91 on the stock market today. With Wednesday's gain, T-Mobile stock touched an entry point.
T-Mobile holds a buy point of 139.08. T-Mobile stock has gained 21% in 2022.
AT&T and Verizon reported earnings last week and lowered guidance. AT&T has now led the industry in postpaid phone subscribers for five straight quarters, ending T-Mobile's seven-year run.
Wall Street analysts expect T-Mobile to initiate a stock repurchase plan in 2023 or before amid strong free cash flow growth.
Controlled by Deutsche Telekom, T-Mobile shares hold a Relative Strength Rating of 92 out of a best-possible 99, according to IBD Stock Checkup.
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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
