T-Mobile Tops Profit Outlook, Says Crisis Complicates Forecast
(Bloomberg) -- T-Mobile US Inc. reported profit that exceeded Wall Street estimates but warned the Covid-19 crisis prevents the company from providing a full-year financial forecast -- even as the wireless carrier begins integrating the newly acquired Sprint.
- First-quarter profit rose to $1.10 a share, beating the average of estimates. Sales grew to $11.1 billion, but missed projections. When the coronavirus hit, the company was forced to close stores and stop charging customers extra when they exceed data limits.
- See more details.
- T-Mobile, which completed the $26.5 billion Sprint takeover on April 1, was cautious in its outlook, saying new customers this quarter could range from zero to 150,000, including Sprint’s contribution. Adjusted earnings will be $6.2 billion to $6.5 billion this period. The company said on Feb. 6 it expected to add 2.6 million to 3.6 million regular monthly customers in 2020, excluding new Sprint subscribers.
- In the first quarter, the company added 777,000 regular subscribers, including 452,000 new phone customers. T-Mobile is off to a strong start on lucrative phone-customer gains, in contrast to the loss of 68,000 phone customers at Verizon Communications Inc. and the addition of 163,000 phone customers at AT&T Inc.
- Merger-related costs are expected to be $500 million to $600 million for the current quarter before taxes. The costs were $117 million in the first quarter, net of taxes. The Bellevue, Washington-based company previously projected as much as $300 million in the period.
- The company is reevaluating all of its spending because of the Covid-19 outbreak and economic fallout.
- T-Mobile rose as much as 1.8% to $88.13 in late trading Wednesday. The stock is up 10% this year, compared with a decline of 9.4% at Verizon and a loss of 26% at AT&T.
- Read the statement.
- See analysts’ estimates.
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