Telecom Stock to watch: T-Mobile Us Inc (NASDAQ: TMUS)

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T-Mobile Us Inc (NASDAQ: TMUS) stock rose over 1% in the pre-market session on Feb 7th, 2020 (Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 19, as the company has added more mobile phone subscribers to its monthly plans, some of which come bundled with Netflix Inc service. The company is currently awaiting a decision from a federal judge on whether it can go ahead with its $26.5 billion merger with Sprint Corp as several states had sued to block the deal, considering it to be anti-competitive and will raise prices for customers.

Meanwhile, TMUS has added 1 million net new phone subscribers in the fourth quarter ended Dec. 31, which is in line with analysts’ estimates from research firm FactSet.  T-Mobile’s postpaid phone churn, or the rate of customer cancellations, was 1.01% in the fourth quarter while the analysts projected churn of 0.95%.

TMUS in the fourth quarter of FY 19 has reported the adjusted earnings per share of 87 cents, beating the analysts’ estimates for the adjusted earnings per share of 83 cents, according to figures compiled by Thomson Reuters. The company had reported the adjusted revenue growth of 3.8 percent to $11.88 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $11.83 billion, according to IBES data from Refinitiv.

TMUS projects to add between 2.6 million to 3.6 million branded postpaid net additions in 2020, even without the merger with Sprint. For fiscal 2020, the company expects Adjusted EBITDA to be in the range of $13.7 to $14.0 billion in 2020. This is including the leasing revenues projected to be in the range of $450 to $550 million and takes into account the network expansion, including the continued deployment of the 600 MHz spectrum and 5G network.

For the first quarter 2020, pre-close merger-related costs are projected to be in the range of $200 to $300 million before taxes.

Net cash provided by operating activities, excluding payments for merger-related costs and any settlement of interest rate swaps, is anticipated to be in the range of $7.9 to $8.5 billion. Free Cash Flow, excluding payments for merger-related costs and any settlement of interest rate swaps, is projected to be in the range of $5.4 to $5.8 billion.

On the other hand, the company In December 2019, the company has launched America’s first nationwide 5G network, that includes the prepaid 5G with Metro by T-Mobile, and is covering more than 200 million people and more than 5,000 cities and towns across the United States.

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