T-Mobile Tops Profit Outlook, Says Crisis Complicates Forecast

(Bloomberg) -- T-Mobile US Inc. reported profit that exceeded Wall Street estimates but warned the Covid-19 crisis prevents the company from providing a full-year financial forecast -- even as the wireless carrier begins integrating the newly acquired Sprint.

First-quarter profit rose to $1.10 a share, beating the average of estimates. Sales grew to $11.1 billion, but missed projections. When the coronavirus hit, the company was forced to close stores and stop charging customers extra when they exceed data limits.
See more details.

Key Insights

T-Mobile, which completed the $26.5 billion Sprint takeover on April 1, was cautious in its outlook, saying new customers this quarter could range from zero to 150,000, including Sprint's contribution. Adjusted earnings will be $6.2 billion to $6.5 billion this period. The company said on Feb. 6 it expected to add 2.6 million to 3.6 million regular monthly customers in 2020, excluding new Sprint subscribers.
In the first quarter, the company added 777,000 regular subscribers, including 452,000 new phone customers. T-Mobile is off to a strong start on lucrative phone-customer gains, in contrast to the loss of 68,000 phone customers at Verizon Communications Inc. and the addition of 163,000 phone customers at AT&T Inc.
Merger-related costs are expected to be $500 million to $600 million for the current quarter before taxes. The costs were $117 million in the first quarter, net of taxes. The Bellevue, Washington-based company previously projected as much as $300 million in the period.
The company is reevaluating all of its spending because of the Covid-19 outbreak and economic fallout.

Market Reaction

T-Mobile rose as much as 1.8% to $88.13 in late trading Wednesday. The stock is up 10% this year, compared with a decline of 9.4% at Verizon and a loss of 26% at AT&T.