T-Mobile US (NASDAQ: TMUS) released its second-quarter earnings report before the market opened on Thursday, presenting a mixed picture. The company's established customer loyalty program helped it maintain a solid market position, with new wireless account additions and core earnings metrics surpassing expectations. However, overall sales fell short of analyst estimates, sending shares down nearly 6% in pre-market trading.

For the second quarter, T-Mobile US reported sales of $22.8 billion, an increase of nearly 8% year-over-year, but this missed the consensus estimate of $22.9 billion. Service revenues, which typically exclude device sales, rose 9% to $19 billion. Earnings per share came in at $2.99, up 5% from a year ago and well above the anticipated $2.59. Adjusted EBITDA grew 12% to $9.54 billion, slightly beating market expectations.

During the three months ending June 30, the company added 277,000 net new accounts. While this represented a 13% decline compared to the same period last year, it still exceeded the Street's forecast of 264,300 new accounts.

Strategic Shift in Metrics Amid Intense Industry Competition

T-Mobile US has moved away from reporting traditional postpaid phone net additions and now uses net account additions as its primary growth metric. This strategic change, driven by new CEO Srini Gopalan, was first implemented in the first-quarter report. CFO Peter Osvaldik explained that over 90% of postpaid accounts have more than one line, and simply counting new lines does not accurately reflect value creation. The company now focuses on the trend of customers transferring their entire business relationship to T-Mobile.

Notably, T-Mobile US continues to attract customers through its decade-old "T-Mobile Tuesdays" loyalty program, offering a wide range of deals and rewards. Gopalan stated in Thursday's announcement that the company's strong relationship with customers is a key factor in achieving "substantial progress" toward its short-term and long-term financial goals. He also expressed confidence in growth opportunities in wireless, broadband, and new business areas as the company's value proposition gains traction and investments in network and technology continue.

With competition intensifying in the mobile market, all three major U.S. telecom carriers are bundling home internet and wireless services to offer one-stop connectivity. T-Mobile US has recently retired some older plans, leading to slight price increases for some consumers, a move similar to one taken by AT&T.

Full-Year Cash Flow Guidance Raised, Account Targets Unchanged

T-Mobile US raised its full-year cash flow guidance while maintaining its net account addition forecast. The company now expects adjusted free cash flow (including net spending related to the UScellular merger) to be between $18.4 billion and $18.8 billion, up from the prior range of $18.1 billion to $18.7 billion. The outlook for net account additions remains unchanged at between 950,000 and 1.05 million for the year.

T-Mobile US is the second of the three major U.S. wireless carriers to report quarterly results. On Wednesday, AT&T beat expectations on most metrics, including monthly mobile subscriber additions and adjusted earnings per share. Verizon is scheduled to report its second-quarter results on Friday, July 24.

In pre-market trading on Thursday, shares of T-Mobile US fell 5.58%, while AT&T rose over 1% and Verizon dipped 0.2%.