Record T-Mobile Subscriber Growth Offsets Earnings Miss
ThinkstockT-Mobile US Inc. (NYSE: TMUS) reported its third-quarter results after the market close on Monday as -$0.12 in earnings per share and $7.35 billion in revenue. That was against consensus estimates of $0.02 in earnings per share and $7.42 billion…
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T-Mobile US Inc. (NYSE: TMUS) reported its third-quarter results after the market close on Monday as -$0.12 in earnings per share and $7.35 billion in revenue. That was against consensus estimates of $0.02 in earnings per share and $7.42 billion in revenue. Thomson Reuters reported the previous year’s third-quarter earnings as -$0.03 per share on $6.69 billion in revenue.
The company’s guidance for the full year sees 4.3 million to 4.7 million post-paid net additions, which is up from the previous guidance of 3.0 million to 3.5 million. The previous guidance for EBITDA and capital expenditures remained unchanged.
T-Mobile reported a net loss of $94 million for the third quarter, compared to the net loss of $36 million in same period of the previous year.
Service revenues for the third quarter were $5.684 billion, up 10.6% from the previous year. Equipment sales were recorded at $1.561 billion, up 6.4% from the third quarter in 2013. However, cost of services was $1.488 billion and cost of equipment sales was $2.308 billion. Other SG&A expenses totaled $2.283 billion for the quarter.
This was the best quarter for T-Mobile in branded postpaid net additions, coming in at 1.4 million. The branded postpaid phone net additions more than doubled quarter-over-quarter to 1.2 million. Branded prepaid net additions were up more than four times quarter-over-quarter to 411,000.
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In September, T-Mobile issued $3.0 billion aggregate principal amount of notes in a registered public offering, consisting of $1.3 billion aggregate principal amount of 6% senior notes due 2023 and $1.7 billion aggregate principal amount of 6.375% senior notes due 2025. In early October, T-Mobile used approximately $1.0 billion of the proceeds from the debt issuance to redeem its outstanding 7.875% senior notes due 2018.
On October 20, Morgan Stanley initiated coverage on T-Mobile with an Overweight rating and a $31 price target.
Shares of T-Mobile closed Monday down almost 0.5% at $27.99 and were up almost 2.5% to $28.68 in Tuesday morning trading.
The shares have a consensus analyst price target of $35.58 and a 52-week trading range of $24.50 to $35.50. T-Mobile has a market cap of about $22 billion.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
