We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is T-Mobile US (TMUS) in Trouble for Accounting Practices?
Read MoreHide Full Article
T-Mobile US Inc. (TMUS - Free Report) –the fastest growing wireless carrier in the U.S. – has been accused of dodgy accounting practices by the CtW Investment Group.
Non-GAAP Figure Issues
Present Securities and Exchange Commission (SEC) rules allow companies to report non-GAAP performance metrics. However, since non-GAAP measures are generally presented as per the discretion of management, companies are required to show a reconciliation statement detailing the exact reasons for the difference between the GAAP and the non-GAAP numbers. CtW group claims that T-Mobile US has provided inadequate details on the same.
The CtW group’s claims are largely focused on the revenue estimates adopted for accounting of T-Mobile US’s Equipment Installation Plans (EIP). Additionally, T-Mobile US has been held accountable for providing a lower amount of credit loss allowance while in reality, its customers have been unable to meet their contractual obligations. Thus, by disregarding the credit risks associated with the EIPs, T-Mobile US may have inappropriately boosted its profits. Notably, shady accounting practices relating to EIPs have been a concern for investors in the wireless industry. T-Mobile US’ rival Sprint Corp. (S - Free Report) has also been facing similar issues.
Other Concerns
CtW group also claims that T-Mobile US has not disclosed the amount spent on spectrum licenses in its cash flow statement, boosting its periodic cash flow in the process. Additionally, T-Mobile US may have also manipulated the cash flow statement by shifting some of its customers in the ‘installment plan’ system to the ‘phone lease’ system.
Our Take
Recently, T-Mobile US has been fast gaining traction as a wireless carrier in the U.S. In order to pose a challenge to bigger rivals like Verizon Communications Inc. (VZ - Free Report) and AT&T (T - Free Report) , the company needs to invest further. However, investors give utmost importance to earnings and hence deceitful accounting practices may dent the company’s ability to draw investments.
In addition to the recommendations that are available to the public on our website, how would you like to 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. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is T-Mobile US (TMUS) in Trouble for Accounting Practices?
T-Mobile US Inc. (TMUS - Free Report) –the fastest growing wireless carrier in the U.S. – has been accused of dodgy accounting practices by the CtW Investment Group.
Non-GAAP Figure Issues
Present Securities and Exchange Commission (SEC) rules allow companies to report non-GAAP performance metrics. However, since non-GAAP measures are generally presented as per the discretion of management, companies are required to show a reconciliation statement detailing the exact reasons for the difference between the GAAP and the non-GAAP numbers. CtW group claims that T-Mobile US has provided inadequate details on the same.
The CtW group’s claims are largely focused on the revenue estimates adopted for accounting of T-Mobile US’s Equipment Installation Plans (EIP). Additionally, T-Mobile US has been held accountable for providing a lower amount of credit loss allowance while in reality, its customers have been unable to meet their contractual obligations. Thus, by disregarding the credit risks associated with the EIPs, T-Mobile US may have inappropriately boosted its profits. Notably, shady accounting practices relating to EIPs have been a concern for investors in the wireless industry. T-Mobile US’ rival Sprint Corp. (S - Free Report) has also been facing similar issues.
Other Concerns
CtW group also claims that T-Mobile US has not disclosed the amount spent on spectrum licenses in its cash flow statement, boosting its periodic cash flow in the process. Additionally, T-Mobile US may have also manipulated the cash flow statement by shifting some of its customers in the ‘installment plan’ system to the ‘phone lease’ system.
Our Take
Recently, T-Mobile US has been fast gaining traction as a wireless carrier in the U.S. In order to pose a challenge to bigger rivals like Verizon Communications Inc. (VZ - Free Report) and AT&T (T - Free Report) , the company needs to invest further. However, investors give utmost importance to earnings and hence deceitful accounting practices may dent the company’s ability to draw investments.
T-MOBILE US INC Price
T-MOBILE US INC Price | T-MOBILE US INC Quote
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to 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. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>