T-Mobile tops analysts’ estimate for earnings but falls short on the revenue front in Q1

T-Mobile tops analysts’ estimate for earnings but falls short on the revenue front in Q1
Written by:
Wajeeh Khan
7th May, 19:53
Updated: 7th May, 19:56
  • T-Mobile tops analysts' estimate for earnings in the first quarter but falls shy on the revenue front.
  • The U.S wireless network operator cites Coronavirus for not giving full-year financial guidance.
  • The American company says Sprint added more than half a million net postpaid users in March.

T-Mobile US Inc. (NASDAQ: TMUS) released its quarterly financial results on Wednesday that topped analysts’ estimate for earnings but fell short on the revenue front. In the regular session, the company dropped around 2.7% in the stock market but it was followed by a 1.3% recovery in extended trading.

T-Mobile recorded its net income at £769 million in the first quarter that translates to 89 pence per share. In the same quarter last year, the company reported a lower £734 million net income or 86 pence per share.

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T-Mobile’s Q1 revenue comes in stronger than last year

In terms of revenue, the American wireless network operator posted £8.98 billion in the recent quarter that came in stronger than £8.96 billion in the comparable quarter of last year.

According to Forecast, experts had forecast the company to print £9.23 billion in revenue in the first quarter. Their estimate for earnings per share (EPS) was capped at 83 pence per share. T-Mobile remarked in its statement on Wednesday:

“We expect our business, liquidity, financial condition, and operating results to continue to be adversely impacted by the COVID-19 pandemic for the remainder of 2020 and potentially thereafter.”

Citing the Coronavirus uncertainty, the company also said that it is difficult for it to give meaningful guidance for the full-year at this stage. According to T-Mobile:

“In addition, we are in the process of re-evaluating our spending across various operating expenses. We are taking actions to adjust our spending given the significant uncertainty around the magnitude and duration of any recessionary impacts arising from the COVID-19 pandemic.”

The company, however, didn’t divulge further information regarding what these actions could be. COVID-19 has so far infected more than 1.2 million people in the United States and caused over 76,000 deaths.

Sprint adds over 500K net postpaid users in March

After meticulous scrutiny from the regulators, T-Mobile got the green light and finalized its Sprint acquisition in April. As per its announcement last week, Sprint added over 500K net postpaid users in March.

At £76.66 per share, T-Mobile is currently around 20% up year to date in the stock market. Previously, the Coronavirus driven downward rally had pushed the stock roughly 6% down in March as compared to the price at which it started the new year.

T-Mobile performed fairly upbeat in 2019 with an annual gain of around 20%. The company is currently valued at £94.65 billion and has a price to earnings ratio of 23.30.

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