T-Mobile US Inc. (TMUS – Snapshot Report) reported strong financial results in the fourth quarter of 2014. Both the top and the bottom lines surpassed the respective Zacks Consensus Estimate.
This Zacks Rank #3 (Hold) company competes with Verizon Communications Inc. (VZ – Analyst Report), AT&T Inc. (T – Analyst Report) and Sprint Corp. (S – Analyst Report) in the highly price-sensitive U.S. wireless market. However, T-Mobile’s “Un-Carrier” service which was launched in 2013 to offer a series of price concessions like no annual service contract, equipment installment facility, free international data roaming, to name a few, helped the company to gain a large number of customers.
GAAP net income in the fourth-quarter was $101 million or 12 cents per share compared with a net loss of $20 million or a loss of 3 cents per share in the year-ago quarter. Quarterly earnings per share of 12 cents comfortably outpaced the Zacks Consensus Estimate of 9 cents.
T-Mobile USA Inc. – Earnings Surprise | FindTheBest
Total revenue increased 19.4% year over year to $8,154 million in the fourth quarter, surpassing the Zacks Consensus Estimate of $7,908 million. The year-over-year upside was aided by higher branded, services and equipment sales revenues on the back of a large customer base.
Quarterly operating income was $433 million, up a whopping 211.5% year over year. Operating margin was 5.3% against 2% in the prior-year quarter. Adjusted EBITDA was $1,751 million, up 41.3% year over year. Adjusted EBITDA margin was 21.5% compared with 18.1% in the year-ago quarter.
The company sold 8 million smartphones in the fourth quarter, representing 93% of total phone sales. In Jan 2015, the FCC (Federal Communications Commission) announced that T-Mobile was the winning bidder of AWS-3 spectrum licenses covering approximately 97 million people for an aggregate bid price of $1.8 billion. The company expects to receive the AWS-3 spectrum licenses, subject to regulatory approval, in the second quarter of 2015.
