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T-Mobile US (TMUS) Tops Q1 Earnings & Revenue Estimates
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T-Mobile US Inc. (TMUS - Free Report) reported strong financial results in the first quarter of 2017 wherein both the top line and bottom line outpaced the Zacks Consensus Estimate. However, the company’s branded postpaid net customer addition declined sequentially.
GAAP net income in the reported quarter was $698 million or 80 cents per share compared with net income of $479 million or 56 cents in the year-ago quarter. Quarterly adjusted (excluding non-recurring items) earnings per share of 46 cents were well above the Zacks Consensus Estimate of 35 cents.
Total revenue jumped 11% year over year to $9,613 million in the reported quarter surpassing the Zacks Consensus Estimate of $9,596 million. Segment-wise, Service revenues were up 11.4% year over year to $7,329 million. Sales from Equipment totaled $2,043 million, up 10.4% year over year while Other revenues were $241 million, up 2.6% year over year.
Quarterly operating income was $1,037 million compared with $1,168 million in the year-ago quarter. Operating margin in the reported quarter was 10.8% compared with 13.5% in the prior-year quarter. Adjusted EBITDA was $2,668 million, down 5.2% year over year. Adjusted EBITDA margin was 36% compared with 43% in the year-ago quarter.
Cash Flow
In the first quarter of 2017, T-Mobile US generated $1,713 million of cash from operations compared with $1,025 million in the prior-year quarter. Free cash flow in the reported quarter was $185 million compared with a negative $310 million in the year-ago quarter.
Liquidity
At the end of the first quarter of 2017, T-Mobile US had $7,501 million of cash and cash equivalents and $20,647 million of debt outstanding compared with $5,500 million and $22,186 million, respectively, at the end of 2016. The debt-to-capitalization ratio at the end of the reported quarter was 0.41 compared with 0.54 the end of 2016.
Subscriber Statistics and Other Metrics
As of Mar 31, 2017, the total customer base of T-Mobile US was 72.597 million, up 10.8% year over year. Branded postpaid phone customers totaled 32.095 million, up 6.2%. Branded postpaid mobile broadband customer count was 3.246 million, surging 29.6%. Branded prepaid customer count was 20.199 million, up 9.6%. Wholesale customers tallied 17.057 million, advancing 19%.
In the reported quarter, T-Mobile US added net 0.798 branded postpaid phone customers, 0.116 branded postpaid mobile broadband customers and 0.386 branded prepaid customers but lost 0.158 wholesale customers. Total net customer addition was 1,142 million, signifying the 16th successive quarter of over one million net customer additions. Quarterly branded postpaid churn was 1.18% compared with 1.33% in the year-ago quarter. Branded prepaid churn was 4.01% compared with 3.84% in the prior-year quarter.
Quarterly branded postpaid phone average revenue per user (ARPU) was $47.53 compared with $46.21 in the prior-year quarter. Branded prepaid ARPU was $38.53 compared with $37.58 in the prior-year quarter. Branded postpaid average billing per user (ABPU) was $61.89 compared with $61.90 in the year-ago quarter.
T-Mobile US, Inc. Price, Consensus and EPS Surprise
For 2017, the company anticipates adjusted EBITDA to be in the range of $10.4–$10.8 billion. Capital expenditure will be in the range of $4.8–$5.1 billion. The company expects branded postpaid net customer addition to fall in the range of 2.8–3.5 million compared with the previous guidance of 2.4–3.4 million.
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T-Mobile US (TMUS) Tops Q1 Earnings & Revenue Estimates
T-Mobile US Inc. (TMUS - Free Report) reported strong financial results in the first quarter of 2017 wherein both the top line and bottom line outpaced the Zacks Consensus Estimate. However, the company’s branded postpaid net customer addition declined sequentially.
T-Mobile US currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The company competes with the likes of Verizon Communications Inc. (VZ - Free Report) , AT&T Inc. (T - Free Report) and Sprint Corp. (S - Free Report) in the highly price-sensitive U.S. wireless market.
GAAP net income in the reported quarter was $698 million or 80 cents per share compared with net income of $479 million or 56 cents in the year-ago quarter. Quarterly adjusted (excluding non-recurring items) earnings per share of 46 cents were well above the Zacks Consensus Estimate of 35 cents.
Total revenue jumped 11% year over year to $9,613 million in the reported quarter surpassing the Zacks Consensus Estimate of $9,596 million. Segment-wise, Service revenues were up 11.4% year over year to $7,329 million. Sales from Equipment totaled $2,043 million, up 10.4% year over year while Other revenues were $241 million, up 2.6% year over year.
Quarterly operating income was $1,037 million compared with $1,168 million in the year-ago quarter. Operating margin in the reported quarter was 10.8% compared with 13.5% in the prior-year quarter. Adjusted EBITDA was $2,668 million, down 5.2% year over year. Adjusted EBITDA margin was 36% compared with 43% in the year-ago quarter.
Cash Flow
In the first quarter of 2017, T-Mobile US generated $1,713 million of cash from operations compared with $1,025 million in the prior-year quarter. Free cash flow in the reported quarter was $185 million compared with a negative $310 million in the year-ago quarter.
Liquidity
At the end of the first quarter of 2017, T-Mobile US had $7,501 million of cash and cash equivalents and $20,647 million of debt outstanding compared with $5,500 million and $22,186 million, respectively, at the end of 2016. The debt-to-capitalization ratio at the end of the reported quarter was 0.41 compared with 0.54 the end of 2016.
Subscriber Statistics and Other Metrics
As of Mar 31, 2017, the total customer base of T-Mobile US was 72.597 million, up 10.8% year over year. Branded postpaid phone customers totaled 32.095 million, up 6.2%. Branded postpaid mobile broadband customer count was 3.246 million, surging 29.6%. Branded prepaid customer count was 20.199 million, up 9.6%. Wholesale customers tallied 17.057 million, advancing 19%.
In the reported quarter, T-Mobile US added net 0.798 branded postpaid phone customers, 0.116 branded postpaid mobile broadband customers and 0.386 branded prepaid customers but lost 0.158 wholesale customers. Total net customer addition was 1,142 million, signifying the 16th successive quarter of over one million net customer additions. Quarterly branded postpaid churn was 1.18% compared with 1.33% in the year-ago quarter. Branded prepaid churn was 4.01% compared with 3.84% in the prior-year quarter.
Quarterly branded postpaid phone average revenue per user (ARPU) was $47.53 compared with $46.21 in the prior-year quarter. Branded prepaid ARPU was $38.53 compared with $37.58 in the prior-year quarter. Branded postpaid average billing per user (ABPU) was $61.89 compared with $61.90 in the year-ago quarter.
T-Mobile US, Inc. Price, Consensus and EPS Surprise
T-Mobile US, Inc. Price, Consensus and EPS Surprise | T-Mobile US, Inc. Quote
Guidance
For 2017, the company anticipates adjusted EBITDA to be in the range of $10.4–$10.8 billion. Capital expenditure will be in the range of $4.8–$5.1 billion. The company expects branded postpaid net customer addition to fall in the range of 2.8–3.5 million compared with the previous guidance of 2.4–3.4 million.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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