T-Mobile CEO on SpaceX partnership — and what's coming for your phone bill

Brian Sozzi

T-Mobile (TMUS) dialed up a so-so quarter late Thursday, but don't tell that to its fearless leader CEO Mike Sievert.

In fact, Sievert and his team think T-Mobile has enough momentum with consumers to begin looking at higher prices where it makes sense.

T-Mobile is offering "unprecedented" value, the often high-energy Sievert told Yahoo Finance Live. He reiterated the company's commitment to being the lowest-cost cell provider, even if it were to raise prices.

Shares of the telecom giant fell more than 3% in premarket trading on Friday, as the company missed analyst forecasts for earnings and postpaid net customer additions.

Earnings were impacted by items that could be filed away as one-time expenses but nonetheless did impact headline profits and initial investor reaction.

"We had some unique items within the quarter including the issuance of SoftBank true-up shares and some accelerated depreciation, neither of which had any cash impacts on the business," a T-Mobile spokesperson explained to Yahoo Finance via email.

T-Mobile issued 48.75 million shares of common stock to Softbank late in the fourth quarter. The issuance reflected the achievement of certain conditions as part of T-Mobile's merger with Softbank's Sprint. But the issuance increased the company's share count, thus lowering its diluted EPS.

A T-Mobile store is pictured in the Manhattan borough of New York, New York, U.S., May 20, 2019. REUTERS/Carlo Allegri/File Photo
A T-Mobile store is pictured in the Manhattan borough of New York, New York, U.S., May 20, 2019. REUTERS/Carlo Allegri/File Photo (Reuters / Reuters)

The company also forecast slowing growth in 2024 compared to 2023 for adjusted operating profits.

"We think T-Mobile set 2024 guidance conservatively, though bulls were likely hoping for more, and more was needed for the stock given beat/raise expectations," KeyBanc analyst Brandon Nispel said in a client note seen by Yahoo Finance.

T-Mobile's results come amid a mixed quarter from rival AT&T (T) this week, and a better-than-expected performance out of Verizon.

Sievert contends T-Mobile is still in growth mode, with 5.7 million net customer additions in 2023 and double-digit percentage operating profit improvement — no small feat in the competitive telecom industry.

Its business should also benefit from the rollout of satellites as part of its partnership with SpaceX to provide service in rural areas, Sievert explained.

About $16 billion in cash remains under a prior stock buyback plan too. T-Mobile repurchased $13.2 billion of its stock in 2023.

Here's how T-Mobile's quarter stacked up.

The earnings rundown

  • Net sales: +1% year over year to $20.48 billion vs. estimate of $19.68 billion

  • Adjusted EPS: +41.5% year over year to $1.67 vs. estimate of $1.91

  • Postpaid net additions: 1.6 million vs. 1.72 million estimated

  • Postpaid churn: 0.96% vs. 0.91% estimated

What else caught our attention: 2024 guidance

  • Postpaid net customer additions are expected to be between 5 million and 5.5 million. In 2023, T-Mobile notched 5.7 million net customer additions.

  • Adjusted operating profits are growing "approximately" 9% at the "mid-point." In 2023, adjusted operating profits increased 10% from the prior year.

  • Average revenue per user (ARPU) is projected to increase by 2%.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.

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