T-Mobile US Inc. (NYSE: TMUS)
TMUS Earnings Report
TMUS released better-than-expected Q2 earnings before the market opened today with $361 million in profits or 42 cents a share. This is down from $391 million in profits, 48 cents per share, a year ago but still much better than analyst projections of 17 cents per share. They attribute this earnings beat on strong subscription growth due to a highly competitive pricing structure, which is cutting into profit margins, but adding to the overall bottom line. Their total customer base has grown to roughly 59 million users and the company expects strong subscriber-growth to continue for the remainder of the year.
President and CEO John Legere in a statement accompanying the earnings announcement said:
“On top of adding 2.1 million new customers in the second quarter, we delivered 14% year-over-year revenue growth and 25% year-over-year Adjusted EBITDA growth. Overall, I think our results speak for themselves.”
The company raised full year guidance for 2015 on subscriber-growth and expects postpaid additions of 3.4 to 3.9 million, up from 3.0 to 3.5 million, with a group consensus estimate of $32.51 billion in revenue or 74 cents per share.
Technically Speaking
Today shares opened up over 1.8% at $37.75 after coming back down from a $39.10 premarket high and has trended up throughout the day on above average volume. Share price has been consolidating over the past couple months between the $36.50 and $40.50 range and is currently marching back towards the high end of that range.
TMUS has been very strong in 2015 with a low of $26.46 and a high of $40.77, a 54% difference from low to high. Today’s close of $38.89 marks a 43.5% rise from the beginning of the year and it looks to continue on this strong trend north as it breaks major moving averages on strong volume after their earnings beat. Look for key resistance levels around $39.70 and $40.00 price range.
According to the analysts covering TMUS, average price target is $42.32 and a current year EPS of 74 cents with a majority of them holding a buy rating on the stock. Based on those estimates and today’s close, that’s roughly 8% upside potential.
About T-Mobile US Inc.
T-Mobile is a telecommunications company that specializes in postpaid and prepaid mobile services via it’s T-Mobile, MetroPCS and GoSmart brands throughout the United States, Puerto Rico and US Virgin Islands. Headquartered in Bellevue, Washington, T-Mobile is the third largest wireless network in the United States with almost 59 million customers, 45,000 employees and annual revenues of $29 billion. They maintain and operate retail stores where they sell their services, smart phones, tablets and other mobile communication devices. After the DOJ rejected AT&T’s attempt to buy T-Mobile in 2011, T-Mobile merged with MetroPCS Communications, the fifth largest carrier at the time, and began trading publicly on the New York Stock Exchange on May 1, 2013. Their main competitors are Sprint (S), AT&T and Verizon Wireless.
