Tuesday, April 16, 2024

T-Mobile Delivers Robust Customer Growth, Profits in First Quarter

T-Mobile US (TMUS - Get Report) delivered strong first-quarter results thanks to robust customer growth that led to solid profitability.

The U.S. wireless carrier reported first-quarter results Tuesday before the markets opened, posting $8.6 billion in total revenues and $0.56 per share in earnings. Wall Street was expecting $8.4 billion in revenue and $0.10 in EPS.

Shares were up in pre-market and initial trading on Tuesday, but have settled and are now down slightly to $40.92.

John Legere, president and CEO of T-Mobile, touted the telco's customer growth.

"I can't think of a better way to start off 2016 than by capturing all of the industry's postpaid phone growth -- again!" he said in a statement on Tuesday. "Our model is working and the business momentum is accelerating across the board."

The third-largest U.S. wireless carrier behind Verizon Communications (VZ - Get Report) and AT&T (T - Get Report) has been steadily adding customers each quarter. In the first quarter, T--Mobile added 2.2 million net customers, marking the twelfth consecutive quarter that T-Mobile has added more than 1 million net customers, and the sixth time in the past seven quarters that it's added more than 2 million customers. It also added more than 1 million net branded postpaid phone customers.

Meanwhile, Ebitda increased 98.1% year-over-year to $2.75 billion, which includes $636 million on a gain from spectrum. Net income also increased, coming in at $479 million, up from a net loss of $63 million over the corresponding period last year.

In addition, T-Mobile shared its guidance for customer outlook and its Ebitda target for the year. The telco is expecting branded postpaid net customer additions to come in between 3.2 million and 3.6 million. Previously, it was anticipating a range of 2.4 million to 3.4 million.

Adjusted Ebitda is expected to be between $9.7 billion to $10.2 billion, which also marks an increase from the previous guidance of $9.1 billion to $9.7 billion.

In order to support customer growth, T-Mobile said it will continue to make improvements to its 4G LTE network. In particular, it will expand Extended Range LTE, which operates on the company's low-band 700 MHz A-Block spectrum and covers about 194 million in more 340 markets. In line with this effort, T-Mobile has already agreed to acquire more 700 MHz A-Block spectrum licenses and plans to expand its 600MHz offerings.

Rival carrier AT&T reports on Tuesday after the markets close. Verizon Communications reported first-quarter earnings last Thursday, coming in just slightly lower than expected by delivering $1.06 EPS and $32.2 billion in revenue, versus analysts' estimate of $1.06 in EPS and revenue of $32.46 billion.

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