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Can Top-Line Growth Benefit T-Mobile (TMUS) Q4 Earnings?

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T-Mobile US, Inc. (TMUS - Free Report) is scheduled to report fourth-quarter 2022 results on Feb 1 after the closing bell. In the last reported quarter, the company’s earnings surprise was a negative 24.53%. It pulled off a trailing four-quarter earnings surprise of 212.69%, on average.

The Bellevue, WA-based wireless service provider is expected to have recorded year-over-year higher revenues, driven by strong performance across its wireless businesses.

Factors at Play

In the fourth quarter, T-Mobile augmented its 5G footprint in the country by introducing 5G Home Internet services in Illinois, Michigan and Wisconsin. The Home Internet service offers fast, affordable home broadband connectivity through a 5G Gateway device and is accessible by all home devices. High-speed Internet net customer additions were 524,000 in the quarter and 2 million for 2022. T-Mobile ended the year with 2.6 million high-speed Internet customers, strengthening its credentials as the nation’s fastest-growing home broadband provider.

It is expected to have reached more than 323 million people with Extended Range 5G and 260 million people with Ultra Capacity 5G. T-Mobile registered 314,000 postpaid net account additions in the fourth quarter, bringing the tally for 2022 to a record-high figure of 1.4 million. Postpaid net customer additions were 1.8 million in the fourth quarter and an all-time high of 6.4 million in 2022. Postpaid phone net customer additions were 927,000 in the fourth quarter.

Total net customer additions were 1.8 million in the fourth quarter, bringing the tally to a record 6.8 million for 2022. Total customer count at the end of 2022 increased to a record high of 113.6 million as it extended its coverage across the length and breadth of the country. These are likely to have generated healthy revenues in the quarter.

During the quarter, T-Mobile collaborated with Cisco to launch a first-of-its-kind cloud native 5G core gateway that moved all of its 5G and 4G traffic to the new cloud-native converged core. This offered faster speeds and lower latency to deliver new 5G and IoT applications at scale, expediting time to market. It also collaborated with Google Cloud to leverage the latter’s expertise in data analytics, AI and ML for its extensive portfolio of leading 5G and edge computing products and solutions. These are likely to be reflected in the upcoming results.

For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $20,893 million, which indicates growth from the year-ago quarter’s reported figure of $20,785 million. The consensus estimate for adjusted earnings per share stands at $1.10, flat year over year.

Earnings Whispers

Our proven model does not predict 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 not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.52%, with the former pegged at $1.09 and the latter at $1.10. 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 and EPS Surprise

TMobile US, Inc. price-eps-surprise | TMobile US, Inc. Quote

Zacks Rank: T-Mobile currently has a Zacks Rank #3.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Universal Display Corporation (OLED - Free Report) is set to release quarterly numbers on Feb 23. It has an Earnings ESP of +1.06% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Applied Materials Inc. (AMAT - Free Report) is +0.42% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 15.

The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +6.88% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 1.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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