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Earnings Results: T-Mobile crushes earnings estimates as subscriber surge continues

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Shares of T-Mobile Inc. were up 2.7% in after-hours trading Tuesday after the telecommunications company easily topped first-quarter revenue and earnings expectations while bringing in a surge of new subscribers.

The company posted net income of $933 million, or 74 cents a share, down from $951 million, or $1.10 a share, in the year-earlier quarter. Analysts tracked by FactSet were expecting 54 cents in GAAP earnings per share.

T-Mobile’s
TMUS,
-2.26%

revenue in the first quarter increased to $19.8 billion from $11.1 billion, though the year-ago results reflect standalone performance from T-Mobile as its merger with Sprint didn’t close until April 1, 2020. The FactSet consensus was for $18.7 billion in revenue for the latest quarter.

The carrier saw 1.4 million net additions in the quarter and 1.2 million postpaid net additions. T-Mobile also recognized postpaid phone net additions of 773,000.

“Our network leadership is fueling customer momentum, delivering merger synergies and expanding our addressable markets for growth,” Chief Executive Mike Sievert said in a release.

The company now expects $2.8 billion to $3.1 billion in merger synergies this year stemming from the Sprint deal, up from its prior projection of $2.7 billion to $3.0 billion.

Roughly half of Sprint’s customer traffic is now being run over T-Mobile’s network, the company disclosed, two times more than last quarter. About 20% of Sprint customers have been moved over to T-Mobile’s network.

In addition to upping its merger-synergy projections, T-Mobile updated various elements of its traditional 2021 outlook. The company now models 4.4 million to 4.9 million postpaid net customer additions this year, up from a prior outlook that called for 4.0 million to 4.7 million. T-Mobile also expects 2021 free-cash flow, including merger-related costs, of $5.1 billion to $5.5 billion, whereas its earlier forecast was for $4.9 billion to $5.4 billion.

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