Yahoo Finance Why Wall Street Expects T-Mobile’s Earnings to Fall in 4Q15
Why Wall Street Expects T-Mobile’s Earnings to Fall in 4Q15
T-Mobile’s earnings in 4Q15
T-Mobile (TMUS) will report its fourth quarter results on February 17. As per Wall Street’s consensus, on an adjusted basis, T-Mobile’s earnings are expected to fall significantly year-over-year in 4Q15. The telecom company’s adjusted EPS (earnings per share) are expected to be ~$0.15 in 4Q15 compared to the company’s adjusted EPS of ~$0.2 in 4Q14. The year-over-year decline is expected to be driven by a contraction in the telecom company’s margins. Now let’s look at T-Mobile’s adjusted earnings and consensus estimates from Wall Street’s analysts in recent quarters.
As you can see in the chart above, Wall Street’s estimates for the telecom company’s adjusted earnings have been conservative in 4Q14, 1Q15, and 2Q15. However, T-Mobile’s earnings did surprise Wall Street analysts in 3Q15, coming in lower than expected.
Earnings from Verizon, AT&T, and Sprint in 4Q15
Two of the top four US wireless players have reported their results for calendar 4Q15. On an adjusted basis, Verizon (VZ) and AT&T’s (T) EPS rose ~25.4% and ~12.5%, respectively, year-over-year. Meanwhile, Sprint’s (S) adjusted losses fell.
Instead of taking on direct exposure US telecom stocks, you can consider getting diversified exposure to the space by investing in the iShares Russell 1000 ETF (IWB). The ETF had ~2.3% exposure to US telecom companies at the end of December 2015.
In the next part of this series, we’ll look at expectations for T-Mobile’s revenue in 4Q15.
Browse this series on Market Realist:
