T-Mobile US, Inc. (NASDAQ: TMUS) second quarter earnings topped analysts' estimates as the No. 3 U.S. wireless carrier on Wednesday reported record low customer attrition and said it was considering a quarterly dividend.
Customers flocked to T-Mobile during the quarter, according to the company's financial results, which showed record low churn of postpaid phone service for the telecom company. The mobile carrier's net adds, a key measure of the number of customers added during the quarter, hit 1.33 million, exceeding the 807,000 expected by Street Account. Business customers are also a burgeoning source of growth for T-Mobile, CEO John Legere said on a conference call.
T-Mobile added 786,000 phone subscribers who pay a monthly bill in the second quarter ended June 30, up from 646,000 in the year-ago period. Analysts on average had expected net additions of 607,000, according to research firm FactSet.
Net income rose to $581 million, or 67 cents per share, from $225 million, or 25 cents per share, a year earlier. Total revenue grew to $10.21 billion from $9.29 billion. Analysts on average had expected earnings of 38 cents per share on revenue of $9.81 billion,
Mobile carriers have been in fierce competition over the past year as consumers have pushed trends like unlimited data plans and the end of contract commitments. T-Mobile saw data volumes growing about 40 percent year-over-year, technology chief Neville Ray told analysts on a conference call last quarter.
The advent of faster internet speeds, coming with 5G-compatible phone chips, is likely to accelerate the competition for wireless customers. The "super cycle" of iPhone 8 customers expected by analysts could also pose an unprecedented challenge for carriers.
Legere said there's no "magic" behind T-Mobile's quarterly results, crediting the beat to investments in the network and "good, old-fashioned focus" from engineers. "This was a competitive quarter," Legere noted. "It was the first full quarter with all the unlimited plans on the market."