T-Mobile US Inc Beats Earnings Estimates, Shares Rise

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As of this writing, shares of T-Mobile were up by 3.23% to $32 per share in premarket trading

T-Mobile released its latest earnings report before opening bell this morning, posting adjusted earnings of 12 cents per share on $8.15 billion in revenue, a 19.4% increase year over year. Analysts had been expecting earnings of 5 cents per share on $7.89 billion in revenue. In the previous quarter, T-Mobile reported a loss of 12 cents per share.

Key metrics from T-Mobile’s earnings report

Adjusted EBITDA for the fourth quarter increased 41.3% to $1.8 billion. For the full year, adjusted EBITDA increased 6% year over year to $5.6 billion. Adjusted EBITDA margin increased from 24% in the third quarter to 30% in the fourth quarter.

T-Mobile reported strong growth during the quarter, with 2.1 million total net adds during the quarter, 1.3 million branded postpaid net adds, and 1 million branded postpaid phone net adds. The mobile carrier also took almost 80% of the industry’s postpaid phone growth during the fourth quarter and almost 100% of it in all of 2014. The company also said it was the only major mobile carrier in the U.S. that saw its adjusted EBITDA margins expand sequentially in the fourth quarter.

Service revenues increased 13.6% year over year in the fourth quarter and 9% for all of 2014. As of the end of the fourth quarter, T-Mobile’s 4G LTE network covered 265 million people, which was greater than management’s expectation of 250 million. The mobile carrier aims to cover 300 million people by the end of this year.

T-Mobile issues guidance

T-Mobile management also said today they expect to add between 2.2 million and 3.2 million branded postpaid net customers. The mobile carrier projects adjusted EBITDA of between 6.8 billion and $7.2 billion for the full year and between $4.4 billion and $4.7 billion in cash capital expenditures.

For the current quarter, T-Mobile warned that adjusted EBITDA will be hit by “a large investment to front end customer growth.” The company also expects to see a non-cash negative impact of between $100 million and $150 million related to “the accounting treatment of Un-carrier 8.0: Data Stash.”

Going forward, the mobile carrier will also start reporting three new metrics in future earnings reports. They are average revenue per account, average billings per account and customers per account.

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