T-Mobile Us Inc. (NASDAQ:TMUS) powered to record highs as cost efficiencies realized from Sprint's purchase continued to strengthen the company’s sentiments in the market. The carrier's market sentiment have also inched high following an impressive third-quarter at the back of full-year guidance that points to continued growth.
T-Mobile Competitive Edge
The acquisition of Sprint has strengthened T-Mobile's competitive edge. The company now has more than 100 million wireless customers, one of the reasons why top line and bottom line beat estimates. The fact that the company operates the largest 5G network explains why it is a force to reckon with in the wireless business, having already overtaken AT&T to become the second-largest carrier.
In the recent quarter, T-Mobile added 2.03 million subscribers, of which 1.98 million were postpaid who are more valuable than prepaid customers as they are less likely to switch to rival providers. Chief Executive Officer, Mike Sievert, has already confirmed that the carrier is adding new customers in record numbers. Likewise, it is consistently and profitably outpacing the competition.
A strengthened competitive edge could as well explain why the company posted a 74% jump in revenue in the third quarter that came in at $19.3 billion. Costs cuts as a result of the merger also helped the company post a 110% increase in adjusted earnings that came in at $7.1 billion.
Faster than expected cost savings in the aftermath of the Sprint integration is another development that continues to affirm T-Mobile's long-term prospects. The company expects $1.2 billion in cost and revenue basis attributed to the merger.
T-Mobile Guidance
Buoyed by the strong third-quarter financial result and the impact of the Sprint merger, T-Mobile has raised its outlook for the second half. It now expects an adjusted EBITDA of between $13.6 billion and $13.7 billion, up from an initial guidance of between $12.6 billion and $12.7 billion.
T-Mobile looks set to continue powering high after a recent spike to all-time highs. Solid underlying fundamentals depicted by revenue and earnings growth should continue to affirm the stock’s growth metrics among investors.