Kevin Carter / Getty Images
T-Mobile added fewer new phone customers than anticipated in the first quarter, sending shares lower.
The cellphone service provider’s CEO also warned that if tariffs raise phone prices, customers will have to cover the increased costs.
T-Mobile’s first-quarter profit and sales beat estimates, and it raised its full-year core adjusted EBITDA guidance.
Shares of T-Mobile US (TMUS) slumped 9% Friday, a day after the cellphone service provider added fewer wireless customers than expected, and warned that customers would have to pay more if new tariffs raised phone prices.
The company reported that it had 495,000 new postpaid phone customers in the first quarter, a drop of 37,000 from the year before. Analysts surveyed by Visible Alpha were looking for 499,000. In addition, the postpaid “churn rate,” a key metric for the industry, rose 5 basis points to 0.91%.
Adding to the concerns for investors were comments by CEO Mike Sievert, who toldYahoo! Finance that T-Mobile is closely watching the situation with potential tariffs on cellphones, and said that if they happen and are significant, “that’s going to have to be borne by the customer. I mean, our model isn’t prepared for something like that.”
The news offset the carrier’s better-than-expected financial results. T-Mobile posted earnings per share (EPS) of $2.58 on revenue that grew nearly 7% year-over-year to $20.89 billion, both above forecasts.
The company increased its full-year outlook for core adjusted EBITDA and raised the lower end of its guidance ranges for net cash provided by operating activities and adjusted free cash flow.
Despite today’s drop, shares of T-Mobile US are up about 7% so far in 2025.
TradingView
Read the original article on Investopedia
