T-Mobile Fourth-Quarter Profit and Revenue Exceed Estimates

T-Mobile reported stronger-than-expected fourth-quarter results, with net income per share up 16% and revenue up 3.8%.
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T-Mobile (TMUS) - Get Report reported stronger-than-expected fourth-quarter results, with net income per share up 16% and revenue up 3.8%.

And Bloomberg News quoted T-Mobile Chief Executive John Legere as saying that the company remained confident that a federal judge would clear the company to merge with Sprint.  (S) - Get Report

The Bellevue, Wash., company, the No. 3 U.S. mobile-service carrier, earned 87 cents a share in the quarter, compared with 75 cents in the year-earlier quarter. Revenue reached $11.88 billion from $11.45 billion.

A survey of analysts by FactSet produced consensus estimates of 83 cents of profit on $11.82 billion of revenue.

At last check T-Mobile shares had edged up 0.9%. They closed the regular Thursday trading session 1.2% higher at $82.77.

Average branded postpaid revenue per user fell 1.1% to $45.79 in the quarter. That beat the FactSet-survey-derived estimate of $45.40. 

The drop reflected factors including more promotions, including the company's Netflix  (NFLX) - Get Report offer. With family plans, T-Mobile offers a free Netflix subscription.

In the fourth quarter T-Mobile added a net 1.9 million customers. That brought its total customer count to 86 million.

Churn, the rate at which customers move to other carriers, was 1.01% in the quarter, up 0.02 percentage point.

In its outlook, the company said that it could not estimate net income for 2020. T-Mobile did say it expected to add 2.6 million to 3.6 million customers in the full year.

In the first quarter, T-Mobile said it expected pre-closing costs related to its proposed merger with Sprint of $200 million to $300 million before taxes.

The company's proposed $26.5 billion merger with Sprint is still up in the air as a federal court in New York decides its fate. U.S. District Judge Victor Marrero heard closing arguments Jan. 15 after 10 days of testimony.

The deal would connect No. 3 T-Mobile and No. 4 Sprint, rivaling the current leaders in wireless, AT&T  (T) - Get Report and Verizon.  (VZ) - Get Report

While federal regulators last year cleared the deal to go through, a group of state attorneys general filed suit in November to block the combination, saying that it would sharply raise prices for consumers.

The Justice Department and the Federal Communications Commission OKd the deal, conditioned on the companies selling assets to Dish Network  (DISH) - Get Report so that company could set up a new wireless carrier. The states say that that condition isn't enough to ensure competition in the wireless market.

On Wednesday, the Justice Department's top antitrust official, Makan Delrahim, at a speech in Washington objected to the states' effort to block the merger, Bloomberg reported.

If the states can prevent such a settlement, “that will wreak havoc on parties’ ability to merge and the government’s ability to settle cases, and cause real uncertainty in the market for mergers and acquisitions,” Bloomberg quoted Delrahim as saying.