Why Sprint and T-Mobile Earnings Looked So Different

Print Email

It is that time of the quarter when the four major telecom companies slug it out with earnings. So far only T-Mobile US Inc. (NASDAQ: TMUS), Sprint Corp. (NYSE: S) and Verizon Communications Inc. (NYSE: VZ) have reported, but AT&T Inc. (NYSE: T) results are coming soon.

Most of these companies are moving toward more data-heavy business models. Hence, AT&T’s acquisition of DirecTV and Verizon’s acquisition of AOL. Not to mention, T-Mobile has already rolled out a plan to stream certain shows and content for its subscribers without them expending data.

Overall, the business model is changing slightly, but fundamentally these companies are still in the same fight.

When T-Mobile reported its third-quarter results on Monday, it posted $0.27 in earnings per share (EPS) and $9.2 billion in revenue. That compared to consensus estimates from Thomson Reuters of $0.22 in EPS and $9.42 billion in revenue.

John Legere said that his company had a total of 2.0 million total net additions, marking the 14th consecutive quarter of over a million. Branded postpaid phone net adds totaled 851,000, and branded prepaid net adds had their second-best quarterly performance in company history, totaling 684,000.

Sprint reported earnings early Tuesday, posting a net loss of $0.04 per share on $8.25 billion in revenue. This compared to consensus estimates of a net loss of $0.07 per share and revenue of $8.69 billion.

The company had total net additions of 740,000 in the quarter, including postpaid net adds of 344,000, prepaid net losses of 427,000 and wholesale and affiliate net adds of 823,000.

Verizon posted its earnings last week. It said that it had EPS of $1.01 and a $30.94 billion in revenue, compared with consensus estimates of $0.99 in EPS on revenue of $31.09 billion. In the same period of last year, the company posted EPS of $1.04 and $33.16 billion in revenue.

Verizon reported 442,000 retail postpaid net adds in the third quarter. These net adds exclude wholesale device and wholesale Internet of Things connections. At the end of third-quarter 2016, Verizon had 113.7 million retail connections, a 2.6% year-over-year increase. Verizon’s industry-leading retail postpaid connections base grew 3% to 108.2 million, and retail prepaid connections totaled 5.5 million.

Looking ahead, AT&T is set to report its results after the markets close on Tuesday. The consensus estimates call for $0.67 in EPS and $42.34 billion in revenue. The same period from last year reportedly had $0.63 in EPS and revenue of $42.12 billion.

Shares of Sprint were down nearly 7% to $6.43 on Tuesday, with a consensus analyst price target of $7.28 and a 52-week trading range of $2.18 to $7.16.

T-Mobile shares were trading at $51.08. The consensus price target is $52.95, and the 52-week range is $33.23 to $51.59.

AT&T was trading at $36.91, within a 52-week range of $32.22 to $43.89. The consensus price target is $41.95.

Shares of Verizon were last seen at $48.01. The consensus price target is $53.48. The 52-week range is $43.79 to $56.95.