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Highlights
- The company’s total service revenue was up 4% YoY to US$14.7 billion in Q3, 2021, helped by strong customer growth.
- It has raised the full-year core adjusted EBITDA guidance to between US$23.4 billion and US$23.5 billion.
- CEO Mike Sievert said the company’s Sprint integration ahead of schedule and strong performance of its Magenta business lifted the quarterly results.
Telecommunication giant T-Mobile US, Inc. (NASDAQ:TMUS) stock jumped more than 5% on Wednesday a day after it reported robust net subscription growth in the third quarter.
The stock was up 5.35% to US$121.99 at 3:59 pm ET.
T-Mobile CEO Mike Sievert said the company’s Sprint integration ahead of schedule and strong performance of its Magenta business lifted the quarterly results.
The company has raised the core adjusted EBITDA guidance after the results to between US$23.4 billion and US$23.5 billion from US$23.0 billion to US$23.3 billion, estimated previously.
The company also added 1.3 million postpaid net additions, an industry-best, in the quarter, it said.
Third-Quarter Snapshot
The company’s total revenues increased 2% YoY to US$19.6 billion. Its total service revenues were up 4% YoY to US$14.7 billion in Q3 2021, helped by robust customer growth.
However, its net income fell to US$691 million YoY in the third quarter, mainly due to merger-related costs.
T-Mobile’s diluted earnings per share (EPS) fell to US$0.55 YoY in the quarter. Its adjusted EBITDA was US$6.8 billion, while the core adjusted EBITDA jumped to a record high of US$6.0 billion in Q3.
The net cash from operating activities soared 25% YoY to US$3.5 billion in Q3. The free cash flow was US$1.6 billion in the quarter.
Its extended 5G coverage was 308 million people was 1.7 million square miles.
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Source: Pixabay
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2021 Outlook
The company’s postpaid net customer additions are expected to be between 5.1 million and 5.3 million, up from 5.0 million to 5.3 million, previously expected.
The net cash from operating activities is expected to be in the range of US$13.9 billion to US$14.0 billion, up from US$13.6 billion to US$13.9 billion, forecast previously.
In addition, free cash flow is expected to be in the range of US$5.5 billion to US$5.6 billion, up from the prior outlook of US$5.2 billion to US$5.5 billion.
Stock Performance
The stock declined around 7% YTD. Its 52-week highest and lowest stock prices were US$150.20 and US$110.71, respectively.
Its P/E ratio is 45.75, the forward P/E one-year ratio is 48.66, and the EPS is US$2.67.
T-Mobile’s current market cap is around US$152.43 billion.
Bottomline
The telecom sector has registered considerable gains in recent months, helped by robust customer growth. Analysts expect the growth momentum to continue as the virus threat further wanes. However, investors should evaluate the stocks carefully before investing in the stock market.
