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Why T-mobile Stock Was Soaring Today
Shares of T-Mobile (NASDAQ: TMUS) were on the move today, climbing after the big-three telecom operator posted better-than-expected results in its fourth-quarter earnings report.
As of 10:37 a.m. ET, the stock was up 8.9%.
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T-Mobile shines
T-Mobile has outperformed rivals AT&T and Verizon in recent years, and that pattern was on display once again in the fourth quarter as its subscriber growth led the industry.
In the quarter, T-Mobile said that it added 903,000 monthly paying phone subscribers, driven by demand for its premium 5G plans. That helped drive service revenue up 6% to $16.9 billion, and overall revenue rose 6.8% to $21.9 billion, which easily beat estimates at $21.36 billion.
Outside the core mobile phone business, it continued to add internet customers, with 428,000 high-speed internet net customer additions in the quarter, bringing it to 6.4 million customers, up 35% from the quarter a year ago. Postpaid phone churn remained under 1%, showing customer retention remains strong.
On the bottom line, earnings per share improved from $1.67 to $2.57, well ahead of the consensus at $2.28, as the company benefited from expanding margins and a lower tax rate.
CEO Mike Sievert said, "In 2024, more new postpaid customers chose the Un-carrier than ever before, and we had our lowest ever full-year postpaid phone churn."
What's next for T-Mobile?
T-Mobile looks set to carry that momentum into 2025, calling for postpaid net customer additions across all products of 5.5 million to 6 million, excluding pending acquisitions, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $33.1 billion to $33.6 billion.
The company continues to pace the industry in 5G download speeds, availability, and coverage, according to analytics company Opensignal. It looks like a good bet to keep outperforming AT&T and Verizon.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.
