Telecom & Wireless

T-Mobile Wraps Asset Sale, Files for Debt Sale, Offers Mixed Guidance

Joining a parade of U.S. firms that are revisiting previously issued guidance for the second quarter, T-Mobile US Inc. (NASDAQ: TMUS) filed a report with the U.S. Securities and Exchange Commission (SEC) on Thursday related to the company’s second-quarter results.

T-Mobile expects to take a noncash, pretax impairment charge of approximately $418 million in connection with the company’s merger with Sprint. Another noncash, pretax charge of $800 million to $900 million is expected related to merger-related costs. That estimate is $300 million higher than a March estimate of $500 million to $600 million.

Now for some good news. Estimated costs related to the COVID-19 outbreak have been lowered by $100 million to a new range of $350 million to $450 million. The even better news is that T-Mobile now expects net postpaid (contract) customer additions of 800,000 to 900,000 in the second quarter. The previous estimate had called for postpaid net additions to fall in a range of zero to 150,000.

The company also announced that the U.S. Department of Justice has cleared the way for the sale of T-Mobile’s prepaid wireless business to Dish Network Corp. (NASDAQ: DISH). T-Mobile operated its prepaid business under three names: Boost Mobile, Virgin Mobile and Sprint. The sale is reportedly worth about $1.4 billion to T-Mobile. The sale is expected to close on July 1.

Finally, T-Mobile filed with the SEC to offer an unspecified amount of senior secured notes in a private placement to qualified institutional buyers through offshore transactions. The notes will not be registered and therefore may not be offered or sold in the United States.

T-Mobile said it plans to use the net proceeds for ongoing liability management, including the redemption of some existing unsecured notes that are subject to redemption without payment of a ‘‘make-whole’’ redemption premium. Given total long-term debt of nearly $35 billion, using the proceeds to pay off other debt is a good thing.

The company’s stock traded up about 3.6% in the noon hour Thursday, at $106.36 in a 52-week range of $63.50 to $106.72. The high was posted Wednesday. The consensus 12-month price target on the stock is $113.95. T-Mobile pays no dividend.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.