Shares of T-Mobile (TMUS) are rising as broadband and mobile Internet growth exceeds Wall Street forecasts

TLDR:

• T-Mobile added 865,000 postpaid phone customers in the third quarter, exceeding analyst expectations of 727,500
• Revenue was $20.16 billion, beating estimates of $20.01 billion
• The company increased its forecast for net postpaid customers from 5.4 to 5.7 million to 5.6-5.8 million
• T-Mobile outperformed competitors AT&T and Verizon in terms of subscriber growth and revenue expectations
• Customer churn remained low at 0.86% in the third quarter

T-Mobile US delivered impressive Q3 2024 results, delivering significant growth in both subscriber base and revenue. The telecommunications giant reported that it added 865,000 postpaid phone customers during the quarter, significantly exceeding Wall Street expectations of approximately 727,500 new subscribers.

The company’s quarterly revenue was $20.16 billion, surpassing analyst estimates of $20.01 billion. This performance represents a 4.7% increase in revenue, demonstrating steady growth in the competitive telecommunications market.

In response to the strong quarterly performance, T-Mobile has increased its net postpaid customer forecast. The company now expects to add between 5.6 million and 5.8 million customers, up from its previous projection of 5.4 million to 5.7 million.

The success can largely be attributed to T-Mobile’s competitive pricing strategy and extensive 5G network coverage. The company’s premium plans, including Go5G Next and Go5G Plus, which bundle streaming services such as Netflix, have proven particularly attractive to customers.

Customer retention has proven to be another bright spot for T-Mobile, with a churn rate of just 0.86% in the third quarter. This low turnover rate indicates strong customer satisfaction with the company’s services and pricing structure.

T-Mobile’s broadband division also showed robust growth, adding 415,000 new subscribers during the quarter. This exceeded analyst forecasts of 401,000 additions and brought the company’s total high-speed internet customer base to 6 million.

The company’s investments in infrastructure continue to expand its market reach. In July, T-Mobile announced a $4.9 billion joint venture with KKR & Co. to acquire fiber optic internet provider Metronet, strengthening its position in the home internet market.

In the mobile device segment, T-Mobile reported positive results following the iPhone 16 release in September. Unlike its competitors AT&T and Verizon, which saw lower equipment revenues due to slower upgrade speeds, T-Mobile experienced slightly higher demand compared to previous iPhone launches.

The company’s financial outlook remains strong, with adjusted earnings before interest, taxes, depreciation and amortization now expected to be between $31.6 billion and $31.8 billion for the year.

T-Mobile’s earnings per share for the quarter came in at $2.61, surpassing analyst expectations of $2.43.

The market reacted positively to these results, with T-Mobile shares rising 2.44% to $226.34 in after-hours trading.

The company’s performance in the wireless sector has been particularly notable compared to its major competitors. T-Mobile was the only major carrier to exceed analysts’ revenue expectations during this period.

Looking ahead, T-Mobile CEO Mike Sievert expects services revenue to grow at a compound annual rate of approximately 5% between 2023 and 2027, reaching a potential of $76 billion.

The company’s shares have posted strong performance throughout the year, rising 38% through Wednesday’s close, surpassing both AT&T’s 34% gain and Verizon’s 14% gain.

T-Mobile continues to expand its national coverage areas while selling fixed wireless access in locations where fiber optic internet availability is limited.

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