T-Mobile US (NASDAQ:TMUS) reported second-quarter results on Thursday morning. The wireless network operator crushed analyst expectations on both the top and bottom lines and raised subscriber additions guidance for the full year.
In the second quarter, Wall Street analysts expected T-Mobile to deliver GAAP earnings of $0.18 per share on roughly $7.9 billion in total sales. Hitting these targets would have amounted to 10.5% year-over-year revenue growth and a steep 63% drop in bottom-line earnings.
Instead, T-Mobile delivered 14% sales growth, stopping at $8.2 billion. Earnings still declined, but at $0.42 per share, the year-over-year damage was only 12.5%.
The company added 2.1 million net new subscribers during the quarter, including 1.0 million of the vaunted postpaid variety. In particular, T-Mobile recorded 760,000 net new subscribers to its postpaid services under the T-Mobile brand -- the rest fall under names such as MetroPCS, GoSmart, BrightSpot, or Project Fi -- and claims to have captured all of the industry's postpaid growth for the quarter.
Looking ahead, T-Mobile set the midpoint of its full-year postpaid branded additions guidance to 3.65 million net new subscribers. Three months ago, that guidance stood at 3.25 million additions. So far, the company has delivered 2.0 million of these additions, leaving less than half of the promised total for the second half of 2015. Management explained this guidance boost by pointing to the popularity of Simple Choice plans and other so-called Un-carrier policies.
The claim of dominance over the entire industry's postpaid growth is very interesting, by the way. Granted, AT&T would only admit to scoring "positive" branded phone net adds in the second quarter, which sounds like a euphemism for "hardly any." But Verizon reported 321,000 million net postpaid phone additions for the same period. That's a smaller surge than T-Mobile's, but hardly zero.
Against that backdrop, T-Mobile appears to be saying Sprint will report net losses for its postpaid phone plans. Sprint's report is due next week -- we'll know more by Tuesday morning. Until then, T-Mobile either revealed what you should expect from Sprint or simply engaged in yet another round of gaudy bombast. It's not like that never happens around CEO John Legere.
Want another taste of Legere's larger-than-life attitude? Oh, alright. Twist my arm, why don't you?
"While the carriers continue to use gimmicks to confuse consumers, T-Mobile continues to listen to customers and respond with moves that blow them away," Legere said in a press statement. "Overall, I think our results speak for themselves."
T-Mobile shares were up 4% by 10:40 a.m., driven by these strong results. As of Wednesday's market close, T-Mobile had surged 37.5% higher year to date. The Un-carrier has left all of its rivals far behind: AT&T shares have gained just 3.3% in 2015, Verizon has fallen 0.5%, and Sprint plunged 15.9% lower.
It sure looks like T-Mobile is growing into its $30 billion market cap. If investors didn't reward this report with a solid share price increase, maybe they saw the good news coming and priced the shares accordingly -- ahead of time.