T-Mobile Claims to Deliver “Its Best Q2 Ever”


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T-Mobile (TMUS) released its second quarter earnings report late yesterday claiming it was its “best Q2 ever” with total revenues up four percent and net income up 35 percent. The carrier said it added more wireless subscribers than Wall Street had expected, as the third-largest U.S. wireless carrier gained customers, due in part to its lower prices, according to Reuters.

Highlights from the report include:

Customer Growth

  • 1.6 million total net additions – 21st consecutive quarter with more than 1 million net additions
  • 1.0 million total branded postpaid net additions – supported by continued strong postpaid other net additions
  • 686,000 branded postpaid phone net additions – led industry for the 18th consecutive quarter
  • 91,000 branded prepaid net additions – flat year-over-year despite increased competitive activity in the market
  • Record low 0.95% branded postpaid phone churn, down 15 bps year-over-year

Financial Performance (all percentages year-over-year)

  • Service revenues up 7% to $7.9 billion – led industry for the 17th consecutive quarter
  • Total revenues up 4% to $10.6 billion
  • Net income up 35% to $782 million and diluted earnings per share (EPS) of $0.92
  • Adjusted EBITDA(1) up 7% to $3.2 billion
  • Net cash provided by operating activities(3) up 14% to $1.3 billion
  • Free Cash Flow(1)(3) up 61% to $774 million
  • Network Expansion Continues, Garners Industry Accolades
  • T-Mobile now covers 323 million people with 4G LTE – targeting 325 million people by year-end 2018
  • Aggressive deployment of 600 MHz in Q2 2018, augmenting existing low-band capabilities on 700 MHz
  • Fastest LTE network according to Ookla; outright winner in 5 of 7 categories in most recent OpenSignal study

Continued Outlook for 2018

  • Increased target for branded postpaid net customer additions of 3.0 to 3.6 million
  • Net income is not available on a forward-looking basis
  • Increased Adjusted EBITDA target of $11.5 to $11.9 billion including leasing revenues of $0.6 to $0.7 billion(1)
  • Cash purchases of property and equipment, excluding capitalized interest, of $4.9 to $5.3 billion, unchanged from the prior target range, now expected to come in at the high end of the range. This includes expenditures for 5G deployment
  • Three-year compound annual growth rates (CAGRs) for Net cash provided by operating activities and Free Cash Flow from FY 2016 to FY 2019 also unchanged at 7% – 12% and 46% – 48%, respectively

August 2, 2018       

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