T-Mobile Earnings Report: Will It Crush Expectations Or Crash And Burn?

The Q3 earnings season is in full swing, and while many companies have already exceeded expectations, all eyes are now on the upcoming report from communications giant T-Mobile US (TMUS).

The burning question on everyone’s mind is: How does T-Mobile stack up against its rivals AT&T (T) and Verizon (VZ)? Let’s dive into the numbers and see what’s in store.

AT&T’s Solid Performance

AT&T started the earnings season with a bang, reporting earnings of $0.64 per share, narrowly beating the Zacks Consensus EPS Estimate.

While this figure was slightly lower than the previous year, the quarterly revenue of $29.9 billion represented a 1% year-over-year increase. The growth was driven by robust 5G and fiber subscriber additions.

The most significant surprise came from free cash flow, which surged to $5.2 billion, a 33% increase from $3.9 billion.

Encouraged by the strong quarter, AT&T raised its full-year free cash flow guidance to approximately $16.5 billion, up from prior estimates of $16 billion.

Adjusted EBITDA guidance was also improved, with full-year growth now expected to be 4% compared to the previous projection of 3%. Investors were clearly pleased with the results, as AT&T’s shares surged post-earnings.

Verizon’s Mixed Bag

Verizon, on the other hand, delivered a mixed bag of results. While the company exceeded earnings expectations, it slightly missed revenue forecasts, with both figures falling short of last year’s numbers.

However, what caught investors’ attention was the year-to-date free cash flow, which reached an impressive $14.6 billion, well above the $12.4 billion from the previous year.

Mirroring AT&T’s positive trajectory, Verizon also raised its FY23 free cash flow guidance to $18 billion, up from prior estimates of $17 billion.

Despite the slight revenue miss, Verizon’s shares saw a boost post-earnings, demonstrating that the market was overall satisfied with the company’s performance.

T-Mobile’s Challenging Outlook

Now, all eyes turn to T-Mobile, which is set to release its Q3 earnings report. Unfortunately, the outlook hasn’t been too rosy for the telecom giant.

Analysts have been bearish on T-Mobile’s prospects, with the Zacks Consensus EPS Estimate dropping nearly 12% since August of this year.

Moreover, top-line expectations have also taken a hit, with the estimated quarterly revenue of $19.4 billion being 1.1% lower during the same time frame.

The big question is whether T-Mobile can defy the odds and beat these gloomy expectations. With its competitors, AT&T and Verizon, setting a positive tone for the earnings season, T-Mobile will need to deliver a compelling performance to win over investors and analysts alike.

In conclusion, the Q3 earnings season is shaping up to be an exciting one for the telecom industry, with T-Mobile’s report in the spotlight.

The company faces headwinds as it prepares to release its earnings, but if it can surprise to the upside like its rivals, we may witness a significant market reaction.

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