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Why Is T-Mobile US (TMUS) Up 3.1% Since the Last Earnings Report?
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A month has gone by since the last earnings report for T-Mobile US, Inc. (TMUS - Free Report) . Shares have added about 3.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
T-Mobile US Q2 Earnings & Revenues Beat Estimates
T-Mobile US’ GAAP net income in the second quarter of 2017 was $582 million or $0.67 per share compared with a net income of $228 million or $0.25 in the year-ago quarter. Quarterly earnings per share of $0.67 were well above the Zacks Consensus Estimate of $0.36.
Total revenue jumped 10% year over year to $10,213 million in the reported quarter, surpassing the Zacks Consensus Estimate of $9,852 million. Segment-wise, Service revenues were up 8.1% year over year to $7,445 million. Sales from Equipment totaled $2,506 million, up 14.5% year over year while other revenues were $262 million, up 24.2% year over year.
Within the Service segment, branded postpaid revenues were $4,820 million, up 6.9% year over year. Branded prepaid revenues were $2,334 million, up 10.1%. Wholesale revenues were $234 million, up 13%. Roaming & Other services revenues were $57 million, up 7.5%.
Quarterly operating income was $1,416 million compared with $833 million in the year-ago quarter. Operating margin in the reported quarter was 13.9% compared with 9% in the prior-year quarter. Adjusted EBITDA was $3,012 million, up 19.1% year over year. Adjusted EBITDA margin was 29.5% compared with 27.2% in the year-ago quarter.
Cash Flow
In the second quarter of 2017, T-Mobile US generated $1,829 million of cash from operations compared with $1,768 million in the prior-year quarter. Free cash flow in the reported quarter was $482 million compared with $419 million in the year-ago quarter.
Liquidity
At the end of the second quarter of 2017, T-Mobile US had $181 million of cash and cash equivalents and $13,728 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 0.40 compared with 0.54 at the end of 2016.
Subscriber Statistics and Other Metrics
As of Jun 30, 2017, total customer base of T-Mobile US was 69.562 million, up 3.2% year over year. Branded postpaid phone customers totaled 32.881 million, up 6.5%. Branded postpaid mobile broadband customer count was 3.277 million, surging 19.3%. Branded prepaid customer count was 20.293 million, up 7.3%. Wholesale customers tallied 13.111 million, declining 11.7%.
In the reported quarter, T-Mobile US added net 0.786 million branded postpaid phone customers, 0.031 million branded postpaid mobile broadband customers, 0.094 million branded prepaid customers and 0.422 million wholesale customers. Total net customer addition was 1.333 million, signifying the 17th successive quarter of over 1 million net customer additions. Quarterly branded postpaid churn was 1.10% compared with 1.27% in the year-ago quarter. Branded prepaid churn was 3.91%, remaining flat year over year.
Quarterly branded postpaid phone average revenue per user (ARPU) was $47.01 compared with $47.11 in the prior-year quarter. Branded prepaid ARPU was $38.65 compared with $37.86 in the prior-year quarter. Branded postpaid average billing per user (ABPU) was $60.40 compared with $62.59 in the year-ago quarter.
Guidance
For 2017, the company anticipates adjusted EBITDA to be in the range of $10.5 - $10.9 billion compared with the previous guidance 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 3.0-3.6 million compared with the previous guidance of 2.8-3.5 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
At this time, T-Mobile US' stock has a strong Growth Score of A, though it is lagging a bit on the momentum front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for growth investors than those looking for value and momentum.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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Why Is T-Mobile US (TMUS) Up 3.1% Since the Last Earnings Report?
A month has gone by since the last earnings report for T-Mobile US, Inc. (TMUS - Free Report) . Shares have added about 3.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
T-Mobile US Q2 Earnings & Revenues Beat Estimates
T-Mobile US’ GAAP net income in the second quarter of 2017 was $582 million or $0.67 per share compared with a net income of $228 million or $0.25 in the year-ago quarter. Quarterly earnings per share of $0.67 were well above the Zacks Consensus Estimate of $0.36.
Total revenue jumped 10% year over year to $10,213 million in the reported quarter, surpassing the Zacks Consensus Estimate of $9,852 million. Segment-wise, Service revenues were up 8.1% year over year to $7,445 million. Sales from Equipment totaled $2,506 million, up 14.5% year over year while other revenues were $262 million, up 24.2% year over year.
Within the Service segment, branded postpaid revenues were $4,820 million, up 6.9% year over year. Branded prepaid revenues were $2,334 million, up 10.1%. Wholesale revenues were $234 million, up 13%. Roaming & Other services revenues were $57 million, up 7.5%.
Quarterly operating income was $1,416 million compared with $833 million in the year-ago quarter. Operating margin in the reported quarter was 13.9% compared with 9% in the prior-year quarter. Adjusted EBITDA was $3,012 million, up 19.1% year over year. Adjusted EBITDA margin was 29.5% compared with 27.2% in the year-ago quarter.
Cash Flow
In the second quarter of 2017, T-Mobile US generated $1,829 million of cash from operations compared with $1,768 million in the prior-year quarter. Free cash flow in the reported quarter was $482 million compared with $419 million in the year-ago quarter.
Liquidity
At the end of the second quarter of 2017, T-Mobile US had $181 million of cash and cash equivalents and $13,728 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 0.40 compared with 0.54 at the end of 2016.
Subscriber Statistics and Other Metrics
As of Jun 30, 2017, total customer base of T-Mobile US was 69.562 million, up 3.2% year over year. Branded postpaid phone customers totaled 32.881 million, up 6.5%. Branded postpaid mobile broadband customer count was 3.277 million, surging 19.3%. Branded prepaid customer count was 20.293 million, up 7.3%. Wholesale customers tallied 13.111 million, declining 11.7%.
In the reported quarter, T-Mobile US added net 0.786 million branded postpaid phone customers, 0.031 million branded postpaid mobile broadband customers, 0.094 million branded prepaid customers and 0.422 million wholesale customers. Total net customer addition was 1.333 million, signifying the 17th successive quarter of over 1 million net customer additions. Quarterly branded postpaid churn was 1.10% compared with 1.27% in the year-ago quarter. Branded prepaid churn was 3.91%, remaining flat year over year.
Quarterly branded postpaid phone average revenue per user (ARPU) was $47.01 compared with $47.11 in the prior-year quarter. Branded prepaid ARPU was $38.65 compared with $37.86 in the prior-year quarter. Branded postpaid average billing per user (ABPU) was $60.40 compared with $62.59 in the year-ago quarter.
Guidance
For 2017, the company anticipates adjusted EBITDA to be in the range of $10.5 - $10.9 billion compared with the previous guidance 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 3.0-3.6 million compared with the previous guidance of 2.8-3.5 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
T-Mobile US, Inc. Price and Consensus
T-Mobile US, Inc. Price and Consensus | T-Mobile US, Inc. Quote
VGM Scores
At this time, T-Mobile US' stock has a strong Growth Score of A, though it is lagging a bit on the momentum front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for growth investors than those looking for value and momentum.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.