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T-Mobile US ( TMUS ) raised 2016 subscriber and cash-flow guidance and reported Q1 revenue that topped views, but shares in the Uncarrier-branded wireless service provider quickly reversed. T-Mobile said it earned 10 cents per share in the March quarter, excluding the after-tax impact of a spectrum sale, in line with consensus estimates. T-Mobile reported a 9-cent per share loss in the year earlier period. Revenue rose 11% to 8.6 billion vs. expectations of $8.4 billion in sales. T-Mobile, controlled by Deutsche Telekom ( DTEGY ), has been gaining subscriber and revenue market share vs. Verizon Communications ( VZ ), AT&T ( T ) and Sprint ( S ) for over two years. T-Mobile’s Binge-on free video plan and other promotions in Q1 were expected to keep its momentum going. T-Mobile fell 4.1% to 39.50 near the market close in the stock market today after rising 2.5% early to 42.20, a seven-month high and near the the 8 1/2-year high of 43.43 set on Sept. 21. T-Mobile rose 2.4% on Monday. IBD’s Take: Get dialed in on T-Mobile US stock, and how it stacks up vs. its wireless rivals with IBD Stock Checkup One overhang on T-Mobile stock has been concern that mobile phone financing plans support lower-credit quality customers and that a weakening economy would add company debt. Craig Moffett, an analyst at MoffettNathanson, says worries could be overblown. “T-Mobile’s blowout first-quarter results not only include falling bad debt, but also near record-low post-paid customer turnover,” said Moffett in a report. T-Mobile said it added 2.2 million subscribers in Q1, up from 1.8 million in the year earlier period. Prepaid subscriber additions jumped to 807,000 from 73,000. T-Mobile added 877,000 postpaid phone lines vs. 748,000 a year earlier. “Bad debt declined sequentially, highlighting efforts to improve credit policies,” said Mike McCormack, analyst at Jefferies, in a report. Verizon on April 21 reported Q1 results and said it lost 8,000 postpaid phone subscribers. AT&T reports Q1 earnings after the market close today. Verizon and AT&T shares fell fractionally Tuesdsay afternoon. Bellevue, Wash.-based T-Mobile raised its 2016 postpaid phone subscriber forecast to 3.4 million at its midpoint of guidance, up from its earlier estimate of 2.9 million. “The net add guidance raise was not all too surprising, since the Street was already projecting 3.6 million for 2016,” said Jennifer Fritzsche, an analyst at Wells Fargo in a report. T-Mobile expects adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to be in the range of $9.7 to $10.2 billion, up from the previous guidance of $9.1 to $9.7 billion. Scalper1 News
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