Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Will Higher Revenues Buoy T-Mobile's (TMUS) Q2 Earnings?

By Zacks Investment ResearchStock MarketsJul 24, 2019 08:55AM ET
Will Higher Revenues Buoy T-Mobile's (TMUS) Q2 Earnings?
By Zacks Investment Research   |  Jul 24, 2019 08:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

T-Mobile US, Inc. (NASDAQ:TMUS) is scheduled to report second-quarter 2019 results on Jul 25, before the opening bell. In the last reported quarter, the company delivered a positive earnings surprise of 23.2%. Notably, T-Mobile surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average beat being 12.1%.

The wireless carrier is likely to report higher year-over-year revenues on the back of solid customer growth and low postpaid phone churn. Whether this can result into an earnings beat remains to be seen.

Let’s find out how things are shaping up prior to the announcement.

Factors at Play

Investments in new geographies, customer segments and customer care continued to fuel T-Mobile’s momentum. The company has been witnessing strong response from new customer segments and rate plans, including T-Mobile for Business.

During the second quarter, the company inked a major content distribution agreement with Viacom — the owner of Nickelodeon, MTV, Comedy Central and Paramount Pictures. The move played an important role in T-Mobile’s delivery of new mobile video services to consumers. The multi-year deal allowed T-Mobile to bring together live linear feeds of Viacom channels along with a range of on-demand content for about 80 million customers.

Further, T-Mobile unveiled an enhanced version of its Layer3 TV service with advanced features — TVision Home. The company also entered into a deal with Amazon (NASDAQ:AMZN) to add Prime Video to TVision Home. Markedly, the deal enabled T-Mobile to offer TVision customers with various live feeds and prime content via the Prime Video application. Such tailwinds are expected to get translated into top-line growth.

Moving on, the Zacks Consensus Estimate for revenues from Service, which accounts for the lion’s share of total revenues, is pegged at $8,433 million, up from $8,277 million reported in the preceding quarter. Revenues from Equipment are estimated to be $2,410 million compared with $2,516 million reported in the previous quarter.

Total revenues for the June quarter are estimated to rise to $11,139 million from $10,571 million, reported in the prior-year quarter. Adjusted earnings per share are pegged at 99 cents. The company reported earnings of 92 cents a year ago.

What Our Model Says

Our proven model does not conclusively show that T-Mobile is likely to beat earnings estimates in the to-be-reported quarter as it does not possess one of the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you’ll see below:

Earnings ESP: T-Mobile’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -3.44% as the former is pegged at 95 cents and the latter at 99 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

T-Mobile US, Inc. Price and EPS Surprise

Zacks Rank: T-Mobile currently carries a Zacks Rank #2. Although this increases the predictive power of ESP, we need a positive Earnings ESP to make us reasonably confident of an earnings beat.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the quarter to be reported:

Dolby Laboratories, Inc. (NYSE:DLB) has an Earnings ESP of +21.15% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

TELUS Corp. (NYSE:TU) has an Earnings ESP of +2.61% and a Zacks Rank #2.

Ciena Corp. (NYSE:CIEN) has an Earnings ESP of +5.26% and a Zacks Rank #2.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

TELUS Corporation (TU): Free Stock Analysis Report

Dolby Laboratories (DLB): Free Stock Analysis Report

Ciena Corporation (CIEN): Free Stock Analysis Report

T-Mobile US, Inc. (TMUS): Free Stock Analysis Report

Original post
Will Higher Revenues Buoy T-Mobile's (TMUS) Q2 Earnings?

Related Articles

Will Higher Revenues Buoy T-Mobile's (TMUS) Q2 Earnings?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email