Is A Beat In Store For T-Mobile (TMUS) This Earnings Season?
Zacks Investment Research | Feb 03, 2020 09:53PM ET
T-Mobile US, Inc. (NASDAQ:TMUS) is scheduled to report fourth-quarter 2019 results on Feb 6, after the closing bell. In the last reported quarter, the company delivered a positive earnings surprise of 19.6%, beating the Zacks Consensus Estimate by 19 cents. Notably, T-Mobile topped the Zacks Consensus Estimate for earnings in the trailing four quarters, the beat being 20.4%, on average.
The national wireless carrier is expected to have recorded higher aggregate revenues on a year-over-year basis, driven by the inherent strength of its resilient business model amid a competitive and cut-throat business environment. The performance was supported by strong customer growth while the company deployed the country’s first nationwide 5G network and worked to close its merger with Sprint. Whether this can result into an earnings beat remains to be seen.
Let’s find out how things have shaped up prior to the announcement.
Factors at Play
During the fourth quarter, T-Mobile continued to demonstrate the brand’s strength and momentum. It added 1.9 million total net customers in the quarter under review, bringing its total customer base to 86 million at the end of 2019. This marked the 27th consecutive quarter in which the company generated more than 1 million total net customer additions.
Bellevue, WA-based T-Mobile deployed America’s first nationwide 5G network in the to-be-reported quarter using 600 MHz spectrum, a foundational layer of its 5G network, covering more than 200 million people and more than 1 million square miles across the United States. The company also saw continued strength in total branded postpaid net additions, with net additions of 1.3 million in the fourth quarter. While branded prepaid net customer additions were 77,000 in the quarter, wholesale net customer additions were 472,000.
Postpaid phone churn accounted to 1.01% in the quarter, up 2 basis points (bps) year over year, reflecting strong brand loyalty in a heightened competitive environment. Branded prepaid churn was 3.97% in the December quarter, down 2 bps year over year.
The Zacks Consensus Estimate for Service segment revenues, which account for the lion’s share of total revenues, is pegged at $8,671 million. This indicates an increase of 5.9% from the year-ago quarter’s reported figure. Revenues from Equipment are estimated to be $2,780 million, implying a decline of 5.4% from the prior-year quarter’s reported figure.
For the December quarter, the consensus estimate for total revenues stands at $11,816 million, implying a rise of 3.2% from the year-ago quarter’s reported figure. Consequently, adjusted earnings per share are pegged at 84 cents, indicating an increase of 12% from the prior-year quarter’s reported figure.
Get The News You Want
What Our Model Says
Our proven model predicts an earnings beat for T-Mobile this time around. The combination of a positive Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.