T-Mobile (TMUS) shares slipped in premarket trading Thursday after the wireless carrier delivered a mixed second-quarter report. Earnings beat Wall Street's expectations, but revenue came up short, and subscriber growth slowed.

The Numbers

T-Mobile reported adjusted earnings of $2.99 per share, comfortably above the analyst consensus of $2.58. Revenue rose to $22.79 billion from $21.13 billion a year ago, but that was below the Street's estimate of $22.94 billion.

Net income edged up 1% to $3.2 billion, which included $146 million (net of tax) in accelerated depreciation and other costs related to the UScellular merger.

Subscriber Trends

The company added 277,000 postpaid net accounts in the quarter, down 13% from a year earlier. That still beat Bloomberg's consensus estimate of 264,341, but the slowdown is notable. Postpaid average revenue per account rose 2% to $152.91, while postpaid account churn ticked up to 0.99% from 0.92% a year ago.

Service revenue grew 9% year over year to $19.0 billion, and postpaid service revenue climbed 13% to $15.9 billion.

Cash Flow and Outlook

Operating cash flow rose to $7.50 billion from $6.99 billion a year earlier. Adjusted free cash flow increased to $4.8 billion from $4.6 billion. T-Mobile raised its full-year forecast for net cash provided by operating activities (including UScellular merger payments) to $28.4-$28.8 billion, up from $28.1-$28.7 billion. It also lifted adjusted free cash flow guidance to $18.4-$18.8 billion from $18.1-$18.7 billion.

The company reaffirmed its outlook for postpaid net account additions of 950,000 to 1.05 million for the full year and continues to expect core adjusted EBITDA of $37.1-$37.5 billion. Capital expenditures are still expected at about $10.0 billion.

Strategy and Competition

T-Mobile is doubling down on premium plans and bundled services to fend off rivals like AT&T (T). The carrier has retired some legacy plans, leading to modest price increases for some customers, and is using its T-Mobile Tuesdays rewards program to boost loyalty.

Executive Srini Gopalan told Bloomberg that strong customer relationships are supporting progress toward the company's financial goals. He said T-Mobile sees significant growth opportunities across wireless, broadband and emerging businesses as it invests in its network and technology.

Chief Operating Officer Jon Freier told Reuters that about 60% of new customers are choosing T-Mobile's highest-tier Experience plans, which include unlimited premium data and device upgrade benefits. He said the company is modernizing its wireless plan lineup while enhancing benefits for legacy customers.

Stock Reaction

Despite the earnings beat and raised guidance, investors focused on the slower subscriber growth and higher churn. T-Mobile shares were down 5.21% at $181.00 in premarket trading Thursday.