People are still paying their phone bills on time

Recession fears among consumers haven’t yet led them to stop paying their T-Mobile (TMUS) cell phone bills on time, contrary to some commentary out of rival AT&T (T).

“Bad debt levels look to us consistent with 2019 pre-pandemic levels, and 2019 was one of our best years ever,” T-Mobile CEO Mike Sievert said on Yahoo Finance Live (video above). “So we have seen a creep up from those pandemic levels but only to one of our best years ever. We’re very interested in this. We’re watching involuntary churn, that’s when people don’t pay and have to leave. We ‘re watching late payments. But so far, we’re not seeing it in anything outside the norms.”

T-Mobile CEO Mike Sievert answers caller questions during the T-Mobile Q4 and Full Year 2021 earnings call on Wednesday, Feb. 2, 2022 in Bellevue, Wash. (Stephen Brashear/AP Images for T-Mobile)

The momentum in bill collections and market share gains on the back of very competitive pricing led T-Mobile to have a better-than-expected third quarter.

Here is how T-Mobile performed compared to Wall Street estimates:

  • Net Sales: $19.47 billion vs. $19.93 billion estimated

  • Postpaid Net Customers Added: 1.6 million vs. 1.5 million estimated

  • Adjusted EBITDA: $6.7 billion vs. $6.88 billion estimated

  • Adjusted EPS: $0.40 vs. $0.38 estimated

Shares of T-Mobile jumped more than 6% in early trading on Friday.

The company again lifted its 2022 guidance for postpaid net customer additions, sales, and adjusted operating profits.

Wall Street is now shifting its attention to T-Mobile as the company looks to potentially repurchase $60 billion in stock from 2023 to 2025. Sievert says the company remains on track to be a big buyer of its stock.

“We view T-Mobile as the cleanest growth and capital return story within our telecom services and cable coverage,” Deutsche Bank Analyst Bryan Kraft wrote in a note to clients.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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