Post Earnings Coverage as T-Mobile Reported Smashing Quarter; Revenue Increased 23%, Net Income Surged 30%

Upcoming AWS Coverage on TELUS Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 22, 2017 / Active Wall St. announces its post-earnings coverage on T-Mobile US, Inc. (NASDAQ: TMUS). The Company disclosed its fourth quarter and fiscal 2016 financial results on February 14, 2017. The No.3 US wireless carrier surpassed top- and bottom-line expectations. Register with us now for your free membership at:

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One of T-Mobile’s competitors within the Wireless Communications space, TELUS Corp. (NYSE: TU), reported its Q4 2016 financial results on February 09, 2017. AWS will be initiating a research report on TELUS in the coming days.

Today, AWS is promoting its earnings coverage on TMUS; touching on TU. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended December 31, 2016, T-Mobile reported service revenues of $7.24 billion, up by 11% compared to service revenues of $6.56 billion in Q4 2015. This marks the 11th consecutive quarter that T-Mobile has led the industry in y-o-y service revenue percentage growth. For the reported quarter, T-Mobile’s total revenues increased by 23% in Q4 2016 to $10.2 billion. The Company’s revenue numbers surpassed analysts’ consensus of $9.84 billion. For FY16, T-Mobile service’s revenues increased by 12% to $27.8 billion. For FY16, the Company’s total revenues increased by 16% to $37.2 billion. This marks the third consecutive year that T-Mobile has led the industry in total revenue percentage growth.

For Q4 2016, T-Mobile reported that Branded postpaid phone Average Revenue per User (ARPU) was $48.37 in Q4 2016, up 0.7% from Q4 2015. For FY16, the Company’s branded postpaid phone ARPU was $47.47, down 0.4% from FY15.

During Q4 2016, T-Mobile’s net income increased by 31% y-o-y to $390 million compared to $297 million in Q4 2015. The Company’s diluted earnings per share (EPS) increased by $0.11 y-o-y to $0.45 in the reported quarter compared to $0.34 per share in last year’s fourth quarter, and exceeding Wall Street’s expectations of $0.30 per share. For FY16, the Company’s net income increased by 99% to $1.5 billion. Excluding spectrum gains, the y-o-y and full-year growth in net income was 84% and 50%, respectively. For full-year 2016, diluted EPS increased by $0.87 to $1.69, up 106% from 2015.

For Q4 2016, T-Mobile’s adjusted EBITDA increased by 12% y-o-y to $2.5 billion. For FY16, the Company’s adjusted EBITDA increased by 41% to $10.4 billion. Excluding spectrum gains, the year-over-year and full-year growth in adjusted EBITDA was 19% and 32%, respectively. Adjusted EBITDA margin, excluding spectrum gains, was 34% in 2016, up from 29% in 2015.

Cellular Metrics

T-Mobile’s total net customer additions were 2.1 million in Q4 2016, bringing the Company’s total customer count to 71.5 million. This was the 15th consecutive quarter in which T-Mobile generated more than 1 million total net customer additions.

T-Mobile’s branded postpaid net additions were 1.2 million in Q4 2016. For FY16, branded postpaid net customer additions were 4.1 million, well above the revised guidance for branded postpaid net customer additions of 3.7 million to 3.9 million provided in connection with the Q3 2016 earnings. Branded postpaid phone net additions were 933,000 in Q4 2016, marking the 12th consecutive quarter that T-Mobile has led the industry in branded postpaid phone net additions. For full-year 2016, T-Mobile added 3.3 million branded postpaid phone customers, capturing all of the industry’s growth for the third consecutive year.

T-Mobile’s Branded postpaid phone churn was a Q4 record of 1.28% in Q4 2016, down 18 basis points from Q4 2015. For FY16, the Company’s branded postpaid phone churn was 1.30%, down 9 basis points.

Branded prepaid net additions were 541,000 in Q4 2016, which once again led the industry driven by the continued success of the MetroPCS brand. For FY16, branded prepaid net additions were 2.5 million, which was the best annual performance in Company history.

For Q4 2016, T-Mobile reported Branded prepaid churn of 3.94% in Q4 2016, down 26 basis points from Q4 2015. For FY16, the Company’s branded prepaid churn was a record-low 3.88%, down 57 basis points from FY15. Wholesale net additions were 363,000 in Q4 2016 and 1.6 million in FY16.

Cash Flow

In Q4 2016, T-Mobile’s cash capital expenditures, excluding capitalized interest, were $0.8 billion. Cash capital expenditures included capitalized interest of $71 million in Q4 2016 and $50 million in Q4 2015. For FY16, cash capital expenditures, excluding capitalized interest, were $4.6 billion, up from $4.5 billion in FY15. The Company’s net cash provided by operating activities was $1.6 billion in Q4 2016, a decrease of $631 million on a y-o-y basis. For FY16, T-Mobile‘s net cash provided by operating activities was $6.1 billion, an increase of $721 million from FY15. The Company’s free cash flow decreased $59 million to $743 million in Q4 2016. For FY16, free cash flow increased $743 million to $1.4 billion.

Fastest and Fastest Growing 4G LTE Network

In its earnings press release, T-Mobile noted that it currently provides 4G LTE coverage to 314 million people, and is targeting to provide 320 million people with 4G LTE coverage by year-end 2017. At the end of Q4 2016, T-Mobile owned or had agreements to own an average of 86 MHz of spectrum across the top 25 markets in the US.

Dividend

On February 17, 2017, T-Mobile announced that the quarterly dividend on its 5.50% Mandatory Convertible Preferred Stock will be paid on March 15, 2017 to holders of record as of March 01, 2017. The dividend will be paid at a rate of $0.6875 per share of Preferred Stock.

2017 Outlook

For FY17, T-Mobile expects to have between 2.4 million and 3.4 million branded postpaid net additions. The Company is targeting between $10.4 billion and $10.8 billion in adjusted EBITDA. Cash capital expenditures guidance is $4.8 billion to $5.1 billion, excluding capitalized interest. Net cash provided by operating activities three-year CAGR is expected to be between 15% and 18%. Free Cash Flow three-year CAGR is expected to be in the range of 45% to 48%.

Stock Performance

On Tuesday, February 21, 2017, the stock closed the trading session at $63.20, falling 1.13% from its previous closing price of $63.92. A total volume of 5.58 million shares have exchanged hands, which was higher than the 3-month average volume of 4.53 million shares. T-Mobile’s stock price rallied 18.37% in the last three months, 36.59% in the past six months, and 76.39% in the previous twelve months. Moreover, the stock gained 9.89% since the start of the year. Shares of the company have a PE ratio of 37.89 and currently have a market cap of $49.38 billion.

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