Text size
Shares of T-Mobile fell 2.2% on Thursday in out-of-hours trading.
GoranJakus / Dreamstime
T-Mobile USA
it closed a 2020 full of moves as it added more subscribers than its rivals and easily outperformed the wider wireless industry. The self-proclaimed “non-carrier” reported better-than-expected earnings and revenue for the fourth quarter Thursday evening, and had previously announced strong subscriber results in early January.
Shares of T-Mobile (ticker: TMUS) fell 2.2% in out-of-hours trading on Thursday to about $ 128. Investors have been expecting a lot from T-Mobile, and it’s likely that the top and bottom rates were already set. In addition, the company’s profits for 2021 and subscriber growth guidelines were just below Wall Street forecasts.
T-Mobile reported 60 cents a quarter earnings per share, beating analysts ’average forecast of 49 cents. But some expected T-Mobile to do even better: estimates ranged from 61 cents per share. The result compares with the 87 cents of stock obtained by the pre-merger with Sprint T-Mobile during the fourth quarter of 2019.
Revenue reached $ 20.3 billion, compared to the consensus forecast of $ 19.9 billion and $ 11.9 billion for autonomous T-Mobile in the same quarter last year. T-Mobile’s adjusted earnings before interest, taxes, depreciation and amortization (or Ebitda) were $ 6.7 billion, ahead of Wall Street’s estimate of $ 6.5 billion. Adjustments include $ 686 million in merger-related costs.
Fourth-quarter subscriber figures previously announced by T-Mobile included net additions of 1.6 million postpaid subscribers (wireless customers receiving a monthly bill), while analysts expected an average of 1.5 million . T-Mobile also said it registered 84,000 net prepaid subscribers last quarter, roughly coinciding with the Wall Street consensus estimate.
Throughout 2020, T-Mobile earned a net profit of $ 3.1 billion – or $ 2.65 per share – and adjusted Ebitda by $ 24.6 billion to $ 50.4 billion in sales. Capital expenditures were $ 11 billion and free cash flow was $ 3 billion. T-Mobile added 5.5 million postpaid subscribers, including 2.2 million postpaid phones, and about 145,000 prepaid subscribers in 2020.
T-Mobile’s rate of decline, the percentage of customers who cancel each month, was 0.9% in 2020 and 1.03% in the fourth quarter.
It was a great quarter for the global growth of wireless industry subscribers:
AT&T
(T) added 1.2 million net postpaid subscribers and
Verizon Communications
(VZ) recorded a net amount of 703,000. All three operators increased their promotions before and during the holidays, and many offer great discounts
apple‘s
(AAPL) new 5G compatible iPhones.
In Thursday’s earnings call, T-Mobile CEO Mike Sievert took a turn at his competitors.
“In a quarter, when Verizon sacrificed growth for profit and AT&T sacrificed profit growth for customer growth, only T-Mobile offered customer growth and profitability, surpassing consensus on both.” said Sievert. “We’re about to get all of your customers.”
T-Mobile sees good times continuing in 2021 as it saves cost savings and economies of scale from Sprint’s acquisition. The company has already made $ 1.3 billion in annual savings since the combination closed in April. Chief Financial Officer Peter Osvaldik said Thursday that T-Mobile expects to see annual synergies of between $ 2.7 billion and $ 3 billion in 2021. This includes savings by combining network, brand and marketing budgets and reducing administrative and back-office costs. .
T-Mobile’s 2021 guidelines presented Thursday also call for net postpaid customers to add between $ 4 billion and $ 4.7 billion, capital spending of $ 11.7 billion to $ 12 billion and a free cash flow of $ 4.9 billion to $ 5.4 billion. dollars. Management also expects to see an adjusted EBITDA of $ 26.5 billion to $ 27 billion, which excludes estimated costs of $ 2.5 billion to $ 3 billion. Wall Street consensus estimates before the call included 5.0 million postpaid subscriptions and $ 27.1 billion in adjusted Ebitda.
T-Mobile will host an investor day in March after announcing the results of the C-band auction. Wall Street expects management to increase its cost-saving forecast for the acquisition of Sprint and give learn about new long-term guidelines.
This should be the next major catalyst for T-Mobile shares, which rose 60% in the last year, when it soared. De Barron it is recommended to buy the shares. It compares to a return of 18%, including dividends for the
S&P 500,
and 1% and 18% loss after dividends for Verizon and AT&T, respectively.
Write to [email protected]