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Will Top-Line Contraction Dent T-Mobile (TMUS) Q1 Earnings?
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T-Mobile US, Inc. (TMUS - Free Report) is scheduled to report first-quarter 2023 results on Apr 27 after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 7.27%. It pulled off a trailing four-quarter earnings surprise of 67.64%, on average. The Bellevue, WA-based wireless service provider is expected to have recorded lower revenues year over year owing to a challenging macroeconomic environment.
Factors at Play
In the first quarter, T-Mobile inked a long-term agreement with AAA to support the latter’s roadside assistance fleets nationwide. AAA aims to enhance productivity by integrating T-Mobile’s loT and Geotab fleet telematics solutions into its roadside assistance fleet. This will enrich assistance providers with crucial data and insights related to the behavioral pattern of the driver, vehicle’s condition and fuel usage. These are likely to have generated incremental revenues in the quarter.
During to the to-be-reported quarter, T-Mobile collaborated with Cisco to offer businesses Cisco Meraki's first-ever 5G cellular gateways for fixed wireless access, the MG51 and MG51E. The solution will enable businesses of all sizes to create enriching and differentiated customer experiences using simplified, scalable and reliable network-managed services powered by T-Mobile's 5G network and the cloud-first Cisco Meraki platform.
The company also partnered with AWS to pair its 5G Advanced Network Solutions portfolio with AWS cloud-based services to enable customers to customize and deploy 5G edge compute solutions. It will help businesses to monitor worker safety on remote industrial campuses, perform predictive maintenance on manufacturing equipment and ensure faster aircraft turnaround times at the airport.
During the quarter, T-Mobile was selected by Vail Resorts, Inc., the country’s largest mountain resort operator, as its exclusive nationwide wireless partner. The multi-year deal will help to improve connectivity for resort employees and guests, explore 5G-powered solutions to enhance resort operations and support sustainability goals. These are likely to be reflected in the upcoming results.
However, T-Mobile faces stiff competition in the wireless market from other major carriers that are aggressively expanding their networks and improving their offerings. In addition, a challenging macroeconomic environment, inflationary pressures and business uncertainty are forcing consumers to have a conservative approach to higher-tier services. This is likely to have led to top-line contraction.
For the March quarter, the Zacks Consensus Estimate for total revenues is pegged at $19,787 million, which indicates a decline from the year-ago quarter’s reported figure of $20,120 million. The consensus estimate for adjusted earnings per share stands at $1.45, significantly up from 57 cents reported a year ago.
Key Developments in Q1
During the quarter, T-Mobile inked a definitive agreement to acquire Ka’ena Corporation for about $1.35 billion to consolidate its position as one of the leading wireless service providers in the country. The buyout will include Ka’ena subsidiaries and brands such as Mint Mobile – a budget wireless provider backed by actor Ryan Reynolds, Ultra Mobile – a wireless service provider catering to international calls, and Plum – a wholesale wireless solutions provider. The transaction is likely to be completed later this year, subject to the fulfillment of mandatory closing conditions and regulatory approvals.
T-Mobile introduced 5G carrier aggregation to combine multiple 5G channels (or carriers) to deliver greater speed and performance. The company merged four 5G channels of the mid-band spectrum – two channels of 2.5 GHz Ultra Capacity 5G and two channels of 1900 MHz spectrum – creating an effective 225 MHz 5G channel. This, in turn, is likely to offer superfast 5G services to customers once it becomes fully operational later this year.
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 +5.54%, with the former pegged at $1.53 and the latter at $1.45. 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 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:
The Earnings ESP for Corning Incorporated (GLW - Free Report) is +3.71% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Apr 25.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +11.23% and it sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Apr 26.
Image: Bigstock
Will Top-Line Contraction Dent T-Mobile (TMUS) Q1 Earnings?
T-Mobile US, Inc. (TMUS - Free Report) is scheduled to report first-quarter 2023 results on Apr 27 after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 7.27%. It pulled off a trailing four-quarter earnings surprise of 67.64%, on average. The Bellevue, WA-based wireless service provider is expected to have recorded lower revenues year over year owing to a challenging macroeconomic environment.
Factors at Play
In the first quarter, T-Mobile inked a long-term agreement with AAA to support the latter’s roadside assistance fleets nationwide. AAA aims to enhance productivity by integrating T-Mobile’s loT and Geotab fleet telematics solutions into its roadside assistance fleet. This will enrich assistance providers with crucial data and insights related to the behavioral pattern of the driver, vehicle’s condition and fuel usage. These are likely to have generated incremental revenues in the quarter.
During to the to-be-reported quarter, T-Mobile collaborated with Cisco to offer businesses Cisco Meraki's first-ever 5G cellular gateways for fixed wireless access, the MG51 and MG51E. The solution will enable businesses of all sizes to create enriching and differentiated customer experiences using simplified, scalable and reliable network-managed services powered by T-Mobile's 5G network and the cloud-first Cisco Meraki platform.
The company also partnered with AWS to pair its 5G Advanced Network Solutions portfolio with AWS cloud-based services to enable customers to customize and deploy 5G edge compute solutions. It will help businesses to monitor worker safety on remote industrial campuses, perform predictive maintenance on manufacturing equipment and ensure faster aircraft turnaround times at the airport.
During the quarter, T-Mobile was selected by Vail Resorts, Inc., the country’s largest mountain resort operator, as its exclusive nationwide wireless partner. The multi-year deal will help to improve connectivity for resort employees and guests, explore 5G-powered solutions to enhance resort operations and support sustainability goals. These are likely to be reflected in the upcoming results.
However, T-Mobile faces stiff competition in the wireless market from other major carriers that are aggressively expanding their networks and improving their offerings. In addition, a challenging macroeconomic environment, inflationary pressures and business uncertainty are forcing consumers to have a conservative approach to higher-tier services. This is likely to have led to top-line contraction.
For the March quarter, the Zacks Consensus Estimate for total revenues is pegged at $19,787 million, which indicates a decline from the year-ago quarter’s reported figure of $20,120 million. The consensus estimate for adjusted earnings per share stands at $1.45, significantly up from 57 cents reported a year ago.
Key Developments in Q1
During the quarter, T-Mobile inked a definitive agreement to acquire Ka’ena Corporation for about $1.35 billion to consolidate its position as one of the leading wireless service providers in the country. The buyout will include Ka’ena subsidiaries and brands such as Mint Mobile – a budget wireless provider backed by actor Ryan Reynolds, Ultra Mobile – a wireless service provider catering to international calls, and Plum – a wholesale wireless solutions provider. The transaction is likely to be completed later this year, subject to the fulfillment of mandatory closing conditions and regulatory approvals.
T-Mobile introduced 5G carrier aggregation to combine multiple 5G channels (or carriers) to deliver greater speed and performance. The company merged four 5G channels of the mid-band spectrum – two channels of 2.5 GHz Ultra Capacity 5G and two channels of 1900 MHz spectrum – creating an effective 225 MHz 5G channel. This, in turn, is likely to offer superfast 5G services to customers once it becomes fully operational later this year.
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 +5.54%, with the former pegged at $1.53 and the latter at $1.45. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
T-Mobile US, Inc. Price and EPS Surprise
T-Mobile US, Inc. price-eps-surprise | T-Mobile US, Inc. Quote
Zacks Rank: T-Mobile currently has a Zacks Rank #3.
Other 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:
Skyworks Solutions, Inc. (SWKS - Free Report) is set to release quarterly numbers on May 8. It has an Earnings ESP of +0.15% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Corning Incorporated (GLW - Free Report) is +3.71% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Apr 25.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +11.23% and it sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Apr 26.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.