T-Mobile free cash flow

Stellar Quarter Performance: T-Mobile Raises Annual Free Cash Flow Forecast on Record Subscriptions

In a move reflecting robust quarterly gains, T-Mobile US has raised its lower-end annual free cash flow forecast. The surge in subscriber additions has exceeded market projections, signaling a remarkable response to the company’s competitively priced plans amidst a fierce market competition. Pre-market trading witnessed a 1% spike in T-Mobile US’s share prices.

Attributing the evolving consumer behavior to economic uncertainties stemming from the global pandemic, T-Mobile US contends that wireless carriers are contending with more cautious spending habits. This has manifested in delayed phone upgrades and a decrease in bundled plan purchases.

T-Mobile now anticipates the adjusted free cash flow for the year to range between $13.4 billion and $13.6 billion, up from the previous projection of $13.2 billion to $13.6 billion. This upward revision underscores the company’s confidence in its growth trajectory.

A key driver of the unexpected surge in subscribers was a reduction in customer churn, complemented by a sustained promotional campaign and a strategic shift towards higher-tier unlimited plans. Impressively, T-Mobile US saw an influx of 850,000 postpaid phone customers in the third quarter, surpassing FactSet’s estimated 773,400 additions.

In light of this performance, T-Mobile US has adjusted its full-year wireless subscriber growth forecast to a range of 5.7 million to 5.9 million, further underscoring the company’s bullish outlook.

Since the unveiling of the iPhone 15, T-Mobile has sought to differentiate itself by offering bundled deals. Nonetheless, industry analysts note that overall promotions across the sector remain more restrained compared to those seen during the iPhone 14 launch last year.

For the three-month period concluding in September, revenue slightly trailed analysts’ expectations, registering at $19.25 billion, as opposed to the anticipated LSEG figures of $19.32 billion. While the figure falls just short of projections, T-Mobile US’s strong subscriber performance and revised annual forecast signal a positive trajectory.

In summary, T-Mobile US’s latest report showcases a thriving quarter, marked by an unexpected surge in subscribers and a confident upward adjustment of its annual free cash flow outlook. This upbeat performance is notably reflected in the company’s surging share prices, reflecting investor confidence in its growth prospects.
Source: Reuters

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