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Will Solid Top-Line Growth Buoy T-Mobile (TMUS) Q4 Earnings?
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T-Mobile US, Inc. (TMUS - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 4, after the closing bell. In the last reported quarter, the company delivered a positive earnings surprise of 129.4% with the bottom line surpassing the Zacks Consensus Estimate by 66 cents. T-Mobile delivered a trailing four-quarter positive earnings surprise of 152.9%, on average.
The Bellevue, WA-based wireless operator is expected to have recorded higher total revenues year over year, despite the COVID-19-related operating challenges. Its performance is likely to have largely been driven by steady 5G deployments and customer additions.
Factors at Play
During the fourth quarter, T-Mobile announced the expansion of its Home Internet pilot service to more than 130 additional cities and towns across nine states, namely Michigan, Minnesota, New York, North Dakota, Ohio, Pennsylvania, South Dakota, West Virginia and Wisconsin. This brought the tally for the Home Internet pilot service to more than 580 cities and towns. T-Mobile’s 5G network covers more than 260 million people across 1.4 million square miles. In addition, the company launched standalone hotspot plans for connected devices offering 100GB of mobile internet data for just $50. T-Mobile also introduced its first 5G mobile hotspot with the ability to connect up to 30 devices to make ultra-fast 5G available in more places at an unprecedented pace.
In the fourth quarter, the company launched new 911 capabilities — Location-Based Routing and Next Generation 911 connectivity over IP — to speed up emergency response times by helping pinpoint the location of callers, reducing the need for call transfers, and enabling a more efficient and effective 911 communication system. It also reportedly became the first major wireless provider to activate the new nationwide 988-emergency lifeline for customers. Such developments are likely to have had a positive impact on the company’s top line.
For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $19,966 million that indicates growth of 68.1% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at 51 cents, which suggests a decline of 41.4% year over year due to the impacts of COVID-19 and non-cash impairment charges. In addition, management’s strategy of introducing several promotional activities such as free music streaming, video offer and price cuts on service plans and adoption of phone leasing plans, where equipment revenues are not booked upfront, is likely to have created a margin squeeze for the company.
Earnings Whispers
Our proven model predicts an earnings beat for T-Mobile this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +11.17%, with the former pegged at 57 cents and the latter at 51 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: T-Mobile currently has a Zacks Rank #3.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
The Earnings ESP for Cambium Networks Corporation (CMBM - Free Report) is +6.75% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Feb 18.
The Earnings ESP for Arista Networks, Inc. (ANET - Free Report) is +0.76% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 18.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Will Solid Top-Line Growth Buoy T-Mobile (TMUS) Q4 Earnings?
T-Mobile US, Inc. (TMUS - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 4, after the closing bell. In the last reported quarter, the company delivered a positive earnings surprise of 129.4% with the bottom line surpassing the Zacks Consensus Estimate by 66 cents. T-Mobile delivered a trailing four-quarter positive earnings surprise of 152.9%, on average.
The Bellevue, WA-based wireless operator is expected to have recorded higher total revenues year over year, despite the COVID-19-related operating challenges. Its performance is likely to have largely been driven by steady 5G deployments and customer additions.
Factors at Play
During the fourth quarter, T-Mobile announced the expansion of its Home Internet pilot service to more than 130 additional cities and towns across nine states, namely Michigan, Minnesota, New York, North Dakota, Ohio, Pennsylvania, South Dakota, West Virginia and Wisconsin. This brought the tally for the Home Internet pilot service to more than 580 cities and towns. T-Mobile’s 5G network covers more than 260 million people across 1.4 million square miles. In addition, the company launched standalone hotspot plans for connected devices offering 100GB of mobile internet data for just $50. T-Mobile also introduced its first 5G mobile hotspot with the ability to connect up to 30 devices to make ultra-fast 5G available in more places at an unprecedented pace.
In the fourth quarter, the company launched new 911 capabilities — Location-Based Routing and Next Generation 911 connectivity over IP — to speed up emergency response times by helping pinpoint the location of callers, reducing the need for call transfers, and enabling a more efficient and effective 911 communication system. It also reportedly became the first major wireless provider to activate the new nationwide 988-emergency lifeline for customers. Such developments are likely to have had a positive impact on the company’s top line.
For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $19,966 million that indicates growth of 68.1% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at 51 cents, which suggests a decline of 41.4% year over year due to the impacts of COVID-19 and non-cash impairment charges. In addition, management’s strategy of introducing several promotional activities such as free music streaming, video offer and price cuts on service plans and adoption of phone leasing plans, where equipment revenues are not booked upfront, is likely to have created a margin squeeze for the company.
Earnings Whispers
Our proven model predicts an earnings beat for T-Mobile this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +11.17%, with the former pegged at 57 cents and the latter at 51 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
TMobile US, Inc. Price and EPS Surprise
TMobile US, Inc. price-eps-surprise | TMobile US, Inc. Quote
Zacks Rank: T-Mobile currently has a Zacks Rank #3.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
Telephone and Data Systems, Inc. (TDS - Free Report) is set to release quarterly numbers on Feb 18. It has an Earnings ESP of +309.09% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Cambium Networks Corporation (CMBM - Free Report) is +6.75% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Feb 18.
The Earnings ESP for Arista Networks, Inc. (ANET - Free Report) is +0.76% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 18.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>