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What You Can Expect from T-Mobile's 1Q17 Earnings

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What You Can Expect from T-Mobile's 1Q17 Earnings PART 1 OF 8

Can T-Mobile Continue Its Earnings Growth in 1Q17?

T-Mobile’s earnings in 1Q17

T-Mobile (TMUS) will report its results for 1Q17 on April 26, 2017. In this series, we’ll take a look at the expectations for the company’s performance during the quarter. Wall Street expects the company’s earnings to fall in 1Q17. Specifically, analysts expect T-Mobile’s EPS (earnings per share) to drop to $0.36 in 1Q17, as compared to its EPS of $0.56 in 1Q16.

Can T-Mobile Continue Its Earnings Growth in 1Q17?

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In 4Q16, T-Mobile’s earnings grew significantly YoY (year-over-year), climbing ~50.0% higher than what Wall Street had anticipated and increasing ~32.4% YoY to reach $0.45—up from $0.34 in 4Q15. The YoY growth in this metric was driven by expansion in the telecom company’s margins. We should note that earnings in 4Q15 included an after-tax extraordinary gain of $0.10 per share on the spectrum license transactions.

T-Mobile’s consensus versus actual earnings

As you can see in the above chart, Wall Street’s estimates of T-Mobile’s earnings were conservative over the past few quarters. T-Mobile had a much better 4Q16 than its major competitors. In 4Q16, Verizon Communications’ (VZ) adjusted EPS fell ~3.4% YoY to reach $0.86. AT&T’s (T) adjusted EPS rose ~4.8% YoY to reach $0.66 in 4Q16, while Sprint (S) managed net postpaid phone subscriber additions of 368,000 in fiscal 3Q16 (quarter ending December 2016), which came at the expense of Verizon and AT&T.

In the next part of this eight-part series, we’ll look at how much revenue growth we can expect from T-Mobile in 1Q17.

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