Tag Archives: dtegy

T-Mobile ‘Blowout’ Q1 Eases Worry Over Low-Credit Subscriber Base

T-Mobile US ( TMUS )raised 2016 subscriber and cash-flow guidance and reported Q1 revenue that topped views, sending shares in the Uncarrier-branded wireless service provider up. 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 0.8% to 40.86 in morning trade in the stock market today  after rising 2% in premarket trading. T-Mobile rose 2.4% on Monday, hitting a six-month high and nearing the 8 1/2-year high of 43.43 set on Sept. 21. 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. 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.

T-Mobile Sale On Back Burner Until Auction, Presidential Election

Deutsche Telekom ( DTEGY ) has shelved plans to put T-Mobile US ( TMUS ) up for sale, pending the outcome of a wireless spectrum auction and the U.S. presidential election, a Reuters report said Tuesday, citing unnamed sources. Deutsche Telekom, which owns two-thirds of T-Mobile, is also in no rush to seek a merger because T-Mobile has been gaining market share vs. AT&T ( T ), Verizon Communications ( VZ ) and struggling Sprint ( S ). The Obama administration’s Department of Justice signaled its opposition to a T-Mobile-Sprint merger in 2014, fearing less competition in the wireless services sector. Some observers speculate cable TV firm Comcast ( CMCSA ) could acquire T-Mobile. And satellite broadcaster Dish Network ( DISH ) has also been looking for a wireless network partner. Federal regulators appear set to go forward this spring with the much-anticipated auction of airwaves now owned by local TV broadcasters. The Federal Communications Commission plans to begin the “Broadcast Incentive Auction” on March 29. The auction, which could last five to six months, will free up an estimated 60 to 80 megahertz of prime, low-frequency radio spectrum for wireless services. In connection with the auction, the FCC will impose a quiet period that bans negotiations over spectrum and other matters. “During that period, there will be no M&A activity in the U.S. telecoms sector,” a source close to Deutsche Telekom told Reuters . T-Mobile has said it could spend up to $10 billion in the auction, with Verizon and AT&T among the other expected bidders. Comcast, too, is seen as likely to bid. If Comcast buys a large amount of spectrum in the auction and thus becomes another major provider of wireless services, that could be a precursor to a wireless acquisition that regulators would likely view favorably, analysts say.

T-Mobile Q4 Earnings Beat, Subscriber Guidance Seen Conservative

T-Mobile US ( TMUS ) early Wednesday reported Q4 earnings above expectations and forecast 2.9 million postpaid phone subscriber additions in 2016 at the midpoint of its guidance range, down from 4.5 million adds last year, amid intensified competition in wireless services. T-Mobile stock was up 3% in early trading after the company posted its latest results. The wireless firms’ subscriber guidance is “likely conservative,” Jefferies analyst Mike McCormack said in a research report. “The company raised net add expectations throughout 2015 and is likely taking a conservative approach (for 2016), particularly given aggressive promotions from Sprint.” T-Mobile has gained market share vs.  AT&T ( T ), Verizon Communications ( VZ ) and Sprint ( S ) with its aggressive, Uncarrier-branded  promotions. T-Mobile, controlled by Germany-based  Deutsche Telekom ( DTEGY ), said December-quarter EPS minus items nearly tripled to 34 cents from 12 cents in the year-earlier quarter vs. analysts estimates of 15-cent profit. Revenue rose 1.2% to $8.25 billion, edging the consensus estimate of analysts polled by Thomson Reuters. For 2016, T-Mobile forecast adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $9.4 billion at the midpoint of its guidance, below analyst expectations. T-Mobile had adjusted EBITDA of $7.4 billion in 2015. It did not provide 2016 revenue guidance in its earnings release. Phone leasing plans that have become standard for wireless service providers have lowered equipment revenue but boosted  EBITDA. T-Mobile said it added 2.06 million subscribers overall in Q4, including postpaid, prepaid and wholesale customers — about the same as Q4 2014. T-Mobile reported “bad debt expense” of $228 million in the quarter, up 52% from the year-earlier quarter. T-Mobile preannounced at a Jan. 6 conference that it added 917,000 postpaid phone subscribers in Q4.  Verizon   said it   added 449,000 postpaid phone customers in Q4 — those billed monthly and more lucrative than prepaid users — while Sprint added 366,000. AT&T in Q4 lost postpaid subscribers for the fifth quarter in a row, shedding 342,000.