T-Mobile CEO on Q2 earnings: 'We can set goals, beat them, and then raise them'
T-Mobile (TMUS) CEO Mike Sievert thinks his telecom giant could dial up more guidance lifts in the quarters ahead as it wrestles market share away from Verizon (VZ) and AT&T (T).
"Over two-and-a-half years ago at our analyst day, we laid out a strategy for this company that showcases that not only would we build the best network, we would have the resources to defend the best value, and we were going to go after massive under-penetrated segments where there's lots of opportunity for T-Mobile," Sievert told Yahoo Finance on Thursday moments after another earnings beat and guidance hike.
"This is a differentiated strategy, and what we have been delivering ever since then is remarkably consistent execution against that strategy," Sievert added. "And that's why we can set goals, beat them, and then raise them."
The company also stood up "record" low churn in the second quarter, or a low number of subscribers leaving the network for whatever reason.
Sievert added his team will continue to be aggressive in buying back stock given the performance of the business. The company's $14 billion buyback plan concludes in September — and a new plan is expected due to the cash flow the business is throwing off, suggested Sievert.
"There is more opportunity in front of us," Sievert added.
Still, T-Mobile stock fell 0.5% in pre-market trading on Friday as the company's sales fell slightly short of consensus.
Here's how T-Mobile's quarter stacked up.
The earnings rundown
Net sales: -2% year over year to $19.2 billion vs. estimate of $19.38 billion
Adjusted EPS: $1.86 ($0.09 loss a year ago) vs. estimate of $1.72
Postpaid net additions: 1.6 million vs. 1.43 million estimated
Postpaid churn: 0.77% vs. 0.81% estimated
What else caught our attention: Full-year forward guidance
Postpaid net customer additions are expected to be between 5.6 million and 5.9 million. Prior guidance was for an increase of 5.3 million to 5.7 million.
Adjusted operating profits are seen in the range of $28.9 billion to $29.2 billion. Prior guidance was for a range of $28.8 billion to $29.2 billion.
What analysts are saying after earnings
"T-Mobile posted healthy 2Q23 results that reflected continued momentum across postpaid phone and FWA net adds, service revenue growth, and margin expansion all driving robust FCF and healthy buybacks. We’re making relatively minor tweaks to our forecasts and reiterate our Outperform rating and $165 price target." — Vijay Jayant, Evercore ISI
"T-Mobile continues to be one of our few growth stories in Communications, and of course offers a non-lead exposed bright spot for US Telecoms investors. However, credit investors are left balancing this fundamental growth story with expectations of a growing capital structure as T-Mobile deploys both growing FCF and new debt to fuel its buyback commitments. We downgraded the name to Neutral recently on relative value and a lack of notable upside catalysts, but continue to like it as a solid core holding given the impressive fundamentals, high quality wireless network, and opportunity for continued share gains versus peers. We still see the best value versus peers in the front-end of the curve. Risks to our rating include near-term USD supply, which we do not expect." -Chris Crosby, JP Morgan
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.
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