T-Mobile (TMUS) Misses Third-Quarter Earnings Estimates, Raises ’22 View:
T-Mobile United States, Inc. TMUS announced somewhat modest third-quarter 2022 results, but with solid client growth fueled by meticulous implementation of operational strategies. The Bellevue, Washington-based firm achieved sector increase in postpaid & broadband users, owing to its 5G network & indicated that the highest combination with a customer-centric approach. However, both the bottom and top lines fell short of the Zacks Consensus Estimate.
Profit After Taxes:
Net earnings of $508 million & Diluted EPS of $0.40 lowered year over year, primarily due to the effects of merger-related expenses of $972 million, and $0.77 per share, & loss related to the anticipated selling of the wireline firm of $803 million, or $0.64 per share, in the current quarter, net of tax.
Revenues:
Despite a good rise in service revenues owing to decreased equipment sales, quarterly total revenues fell to $19,477 million. The bottom line fell short of the average projection of $20,083 million.
Segment Outcomes:
Total service revenues increased 4.3% year on year to $15,361 million, with postpaid service revenue increasing 6.9% ($11,548 million) due to increased customer accounts & average revenue per account (ARPA). T-Mobile had the greatest quarter in the industry, with 1.6 million postpaid net subscriber additions & 854,000 postpaid mobile net customer additions. The average revenue per user (ARPU) for postpaid phones increased 1.7% year on year to $48.89, spurred by premium services such as Magenta MAX.
Prepaid revenue was stable at $2,484 million. In the third quarter, there were 105,000 net prepaid subscriber additions. The prepaid ARPU fell 1.6% to $38.86. Revenue from wholesale and other services was $1,329 million, a 7.5% decrease year on year. For the fourth straight quarter, the business added 578,000 high-speed Internet net customers, the most in the sector.
Revenues from equipment totalled $3,855 million, a 17.3% decrease year on year. Other sales increased 7.8% to $261 million.
Liquidity & Cash Flow:
T-Mobile earned $12,445 million in cash from operational operations in the first 9 months of 2022, up from $10,917 million the previous year. For the first 9 months of the year, free cash flow was $5,472 million, up from $4,534 million the previous year.
The corporation has $6,888 million in money and cash equivalents as of September 30, 2022, with $64,834 million in long-term debt. T-Mobile bought back 4.9 shares in the company for $669 million during the quarter.
Solid Fnancial Results Drive S Third Consecutive Quarter Of Guidance Increase In 2022:
Service sales of $15.4 billion increased 4% year on year, led by 7% rise in Postpaid service revenue.
Net income of $508 million & diluted per-share earnings (“EPS”) of $0.40 dropped year over year, principally owing to merger-related expenditures and a loss linked to the expected selling of the wireline business of $1.8 billion, net of tax. or $1.41 per share.
Core Adjusted EBITDA(2) of $6.7 billion increased 11% year on year, the highest growth rate in the sector, and raised outlook.
Net cash created by operational operations increased 26% year on year to $4.4 billion, the highest growth rate in the sector, and raised outlook.
Cash Flow Flow(2) of $2.1 billion increased 32% year on year, the highest growth in the business, and raised outlook.
In the third quarter, the company bought back 4.9 million shares of common stock for a total cost of $669 million.
Raised Guidance For 2022:
T-Mobile has boosted its 2022 projection across the board. The business now forecasts postpaid net subscriber additions of 6.2 million to 6.4 million, up from 6 million to 6.3 million before. Core net Income (adjusted EBITDA less leasing revenues) is expected to be around $26.2 billion & $26.4 billion, up from $26 billion to $26.3 billion before. It now expects cash from operational operations to range between $16.3 billion and $16.5 billion, up from $16 billion to $16.3 billion before.
Cash acquisitions of properties and equipment, including capitalised interest, are expected to be between $13.7 billion and $13.9 billion, up from $13.5 billion to $13.7 billion before. Free cash flow, including payments for merger-related expenditures, is expected to be in the $7.4 billion to $7.6 billion range, up from $7.3 billion to $7.6 billion before.
T-Mobile expects to complete the Sprint customer network transfer and decommissioning by the end of the year. It increased its merger synergy projection range for 2022 to $5.7 billion to $5.8 billion, up from $5.4-$5.6 billion before. The Ultra Capacity 5G network reaches 250 million people.
Other information:
Total operational expenditures grew to $18,196 million in the third quarter, up from $18,040 million the previous year. Operating income fell from $1,584 million to $1,281 million. T-Mobile reported adjusted EBITDA of $7,039 million, up from $6,811 million the previous year.
Zacks Rank And Stocks To Watch:
T-Mobile presently has a Zacks Rank of #3. (Hold). The entire list of today’s Zacks #1 Rank (Good Buy) stocks can be seen here.
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