Since December 2014, shares of T-Mobile (TMUS) have outperformed the S&P 500 Index. But is it time to give up on the stock?
On Monday, T-Mobile reported third-quarter fiscal 2016 earnings of 27 cents per share, excluding 15 cents in one-time spectrum gains. The results were 5 cents better than expected. Revenue rose 17.8% year over year to $9.25 billion. Adjusted earnings before interest, taxes, depreciation and amortization were $2.63 billion, up from $2.46 billion in the second quarter and up 37.9% from the $1.9 billion in the year-ago period.
The quarter was the 14th consecutive quarter of over 1 million total net subscriber additions. T-Mobile had 2 million total net adds; of those 851,000 were "branded" postpaid net adds. (A postpaid subscriber is a user that gets a bill in the mail instead of prepaying.)
Management predicts that branded postpaid net customer additions for the full year will be between 3.7 million and 3.9 million. That is up from previous guidance of 3.4 million to 3.8 million.
For the full year, management forecasts that adjusted EBITDA will be in the range of $10.2 billion to $10.4 billion. Capital expenditures are expected to be in the range of $4.5 billion to $4.7 billion.
Analysts are looking for revenue of $39.9 billion for the year, up 15%, and earnings per share of $1.51. Next year, revenue is expected to be $40.3 billion and earnings are expected to be up 9% to $1.93 per share.
While all this sounds great, and management has done a great job at propelling the stock higher, you have to wonder how they are doing some of this mobile magic.
