T-Mobile US, Inc.
) reported third-quarter 2013 net loss of $36 million compared to
a loss of $7.6 billion in the year-ago quarter.
Combined adjusted EBITDA (including adjusted EBITDA of
MetroPCS) was $1.3 billion, down from $1.7 billion in the
year-ago quarter. The company's adjusted EBITDA margin was 26%
that deteriorated 500 basis points (bps) year over year. The
decline was mainly due to lower service revenues, higher customer
acquisition expenses owing to growing handset sales and increased
Total revenue increased 8.7% year over year to $6.7 billion
and surpassed the Zacks Consensus Estimate of $6.6 billion.
revenues were $5.1 billion, up 21% year over year with the
inclusion of $1.1 billion from MetroPCS service revenues.
Excluding the favorable impacts of MetroPCS, the company
registered a decline in its service revenues due to increased
adoption of the new Simple Choice plans, which have lower monthly
revenues for the quarter were $1.5 billion against $554 million
in the year-ago quarter. The growth was mainly attributable to
rising handset sales driven by
) iPhone 5 and Samsung Galaxy S4 both. In addition, handsets
generated higher revenue per unit of sales mainly from increased
sales of smartphones, representing higher average revenue per
unit sold in comparison to other handsets.
In the third quarter, branded average revenue per user or
(ARPU) was $45.38 compared with $50.55 in the year-ago quarter.
Branded cost per user (CPU) was $25.00 compared with $28.00 in
the year-ago quarter.
Branded cost per gross addition (CPGA) was $307, which
declined from $382 in the year-ago quarter. Churn (customer
switch) was 3.1%, unchanged year over year.
At the end of the reported quarter, the company had nearly 45
million customers. T-Mobile US added 672,000 branded customers
bringing its base to 36.4 million. At the end of the quarter, the
company had a wholesale customer base of 8.7 million, with
351,000 net customer additions.
T-MobileUSended the third quarter with cash and cash
equivalents (inclusive of short-term investment) of $2,365
million compared with $394 million as of Dec 31, 2012. Capital
expenditures increased 42% year over year to $1.1 billion in the
reported quarter given continued investment in network
modernization and 4G LTE deployment.
T-MobileUS reaffirmed the financial guidance for 2013. The
company maintained adjusted EBITDA projection in the range of
$5.2 billion to $5.4 billion. Pro forma cash capital expenditures
are estimated at $4.2 billion to $4.4 billion. On a reported
basis, the company projects EBITDA in the range of $4.7 billion
to $4.9 billion and cash capital expenditures of $4.0 billion to
T-MobileUS expects branded post-paid net addition of 1.6 to
1.8 million, up from 1.0 to 1.2 million projected previously.
We believe that T-Mobile US remains well established to
solidify its position in the U.S. market with the acquisition of
wireless service provider MetroPCS. The synergies arising from
this acquisition and improved data revenue will propel growth
going forward. In addition, higher smartphone penetration will
drive subscriber addition, fending competition from tier 1
Verizon Communications Inc.
T-Mobile US has a Zacks Rank #3 (Hold).
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