TMUS Set to Report Q1 Results: Will Revenue Growth Boost Earnings?

T-Mobile, US, Inc. TMUS is set to report first-quarter 2025 results on April 24, after the closing bell. In the trailing four quarters, the company delivered an earnings surprise of 11.89%, while in the last reported quarter, it delivered an earnings surprise of 18.43%.

The wireless service provider is expected to have witnessed a top-line expansion year over year, backed by growing demand for its postpaid services. T-Mobile’s customer-first approach and focus on expanding its 5G portfolio for diverse use cases are positive factors. However, fierce competition and premium valuation are concerns.

Factors at Play Ahead of TMUS’ Q1 Earnings Release

T-Mobile continues to boast a leadership position in the 5G market. The company continues to boost its network infrastructure to deliver best-in-class connectivity and coverage nationwide.

During the quarter, T-Mobile was selected as the exclusive wireless carrier to support a wide range of mission-critical operations in New York City (NYC). The TMUS network will serve as the backbone for the most demanding public safety operations, delivering lower latency, faster speeds and guaranteed priority access to NYC first responders even during times of high network congestion.

In the to-be-reported quarter, TMUS successfully achieved a record downlink speed of 4.3 Gbps in a real-world situation. In this venture, T-Mobile utilized Nokia’s 5G RAN equipment and Qualcomm X85 5G Modem-RF. Such advancement is set to open up a vast array of opportunities for T-Mobile’s 5G network.

T-Mobile also introduced two new plans called Essentials First Responder and Essentials Military. The plans aim to deliver the best prices and hundreds of dollars in savings for families of military and first responders. These factors are expected to have boosted T-Mobile’s top line during the quarter.

During the March quarter, the un-carrier launched T-Mobile Starlink Beta, powered by advanced satellite and mobile communications technology. The space-based mobile networks mitigate the issue related to mobile dead zones and automatically connect users when they get out of range of a cell tower. This is likely to have had a favorable impact on TMUS’ earnings during the quarter.

Key Developments in TMUS’ Q1

T-Mobile announced that it has completed the acquisition of Blis, an innovative provider of privacy-centric advertising solutions, and Vistar Media, a leading provider of technology solutions for digital out-of-home advertisements. The integration of Vistar Media and Blis’ advertising technologies will significantly strengthen T-Mobile Advertising Solutions’ business. It will allow TMUS to create a comprehensive product suite that delivers more personalized ads for potential customers and drives greater value for marketers.

TMUS signed a definitive agreement with Grain Management, LLC, to divest its 800 MHz spectrum assets. Per the deal, TMUS will gain Grain’s 600 MHz spectrum licenses and cash. The venture is set to expand T-Mobile’s 600 MHz spectrum band, which will bolster its 5G network.

Overall Expectations From TMUS

Our estimate for total service revenues is pegged at $16.94 billion, implying 5.3% year-over-year growth. The estimate for equipment revenues is pegged at $3.38 billion, indicating a 4.1% increase year over year. Branded postpaid ARPU is likely to grow 1.5% year over year. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $20.59 billion, which indicates an improvement from the year-ago quarter’s reported figure of $19.59 billion. The consensus estimate for adjusted earnings per share is pegged at $2.45, up from $2 reported a year ago.

Earnings Whispers for TMUS Stock

Our proven model does not conclusively predict an earnings beat for T-Mobile this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here.

TMUS’ Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.67%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

T-Mobile US, Inc. Price and EPS Surprise

T-Mobile US, Inc. price-eps-surprise | T-Mobile US, Inc. Quote

TMUS’ Zacks Rank: T-Mobile currently has a Zacks Rank #3.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

The Earnings ESP for General Dynamics GD is +0.48% and it carries a Zacks Rank of 3 at present. The company is scheduled to report its quarterly numbers on April 23. You can see the complete list of today’s Zacks #1 Rank stocks here.

Honeywell International HON is scheduled to report quarterly numbers on April 29. The Earnings ESP for the company is +0.34% and it carries a Zacks Rank of 3 at present.

The Earnings ESP for Qualcomm Technologies, Inc. QCOM is +0.86% and it carries a Zacks Rank of 2 at present. The company is scheduled to report its quarterly numbers on April 30.

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This article originally published on Zacks Investment Research (zacks.com).

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