T-Mobile US reported December-quarter earnings that fell from a year earlier but topped analyst estimates. TMUS stock climbed on Thursday as its forecast for a key earnings metric and 2022 subscriber additions came in above expectations.
The company reported Q4 earnings after the market close on Wednesday. T-Mobile stock popped 10.5% to near 121 in morning trading on the stock market today.
T-Mobile said fourth quarter EBITDA — earnings before interest, taxes, depreciation and amortization — rose 9.6% to $6.3 billion, in line with estimates. Meanwhile, for fiscal 2022, T-Mobile forecast EBITDA growth of 10% to a range of $25.6 billion to $26.1 billion, improving from last year's 7% EBITDA growth, said UBS analyst John Hodulik in a report.
Wall Street analysts expect T-Mobile to initiate a stock repurchase plan in 2023 or before amid strong free cash flow growth.
"Despite a pull forward in capital spending, the free cash flow guide was also stronger at $11.6 billion to $12.6 billion, excluding Sprint merger costs," said Hodulik.
Controlled by Deutsche Telekom, the company expects to add a range of 5 million to 5.5 million postpaid customers in 2022 vs. estimates of 4.66 million.
In the three months ending Dec. 31, T-Mobile earnings were 34 cents on an adjusted basis. The wireless services provider said revenue rose 2% to $20.78 billion.
TMUS Stock: Results Top Expectations
Analysts expected T-Mobile to report adjusted earnings of 18 cents a share on revenue of $21.07 billion. In the year-earlier period, T-Mobile earned 60 cents on revenue of $20.3 billion.
Also, T-Mobile in early January preannounced some wireless metrics. T-Mobile added 844,000 postpaid phone subscribers, slightly below estimates of 854,000.
In addition, TMUS stock trades well below an entry point. Heading into the T-Mobile earnings report, shares were down 5% in 2022.
T-Mobile stock holds a Relative Strength Rating of only 30 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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