T-Mobile US Q1 Profit Beats Estimates; Service Revenues Up 7%

T-Mobile US, Inc. (TMUS) said its first quarter net income decreased 24% and EPS decreased 23% year-on-year primarily due to: higher cost of equipment sales; lower equipment revenues; higher cost of services; and higher SG&A expenses. Core adjusted EBITDA increased 10% to $6.46 billion primarily due to: higher service revenues; and lower cost of services, excluding merger-related costs. Postpaid net account additions were 348 thousand, while postpaid net customer additions were 1.3 million, for the quarter.

Net profit was $713 million or $0.57 per share compared to $933 million or $0.74 per share, last year. The company noted that its net income and EPS, respectively, were impacted by merger-related costs, net of tax, of $1.1 billion and $0.84, compared to $220 million and $0.18, last year.

On average, 18 analysts polled by Thomson Reuters expected the company to report profit per share of $0.32, for the quarter. Analysts’ estimates typically exclude special items.

Revenue increased to $20.12 billion from $19.76 billion, a year ago. Analysts on average had estimated $20.11 billion in revenue. Total service revenues increased to $15.13 billion from $14.19 billion. Service revenues increased 7% primarily due to: increase in both Postpaid service revenues and Prepaid service revenues.

T-Mobile increased merger synergies guidance range to $5.2 to $5.4 billion in 2022 driven by accelerated integration progress. The company revised its postpaid net customer addition guidance to 5.3 to 5.8 million, from prior guidance range of 5.0 to 5.5 million. Core adjusted EBITDA is expected to be between $25.8 billion and $26.2 billion, an increase from prior guidance of $25.6 to $26.1 billion.

Shares of T-Mobile US were up 3% in pre-market trade on Wednesday.

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