Published on 23 Apr 2024 on Zacks via Yahoo Finance
AT&T (T) vs. T-Mobile (TMUS): Which Stock Wins in Q1 Earnings?
The earnings season kicked off in full swing this week, with several companies scheduled to release quarterly numbers. Communication industry giants AT&T Inc. T and T-Mobile US, Inc. TMUS are gearing up to unveil their latest quarterly results, sparking investors’ anticipation for insights into their performance and future outlook.Both companies topped earnings estimates in three of the last four quarters. Ahead of their upcoming reports, let's delve into the current standings of these major telecom rivals.
AT&T Overview
AT&T is set to release first-quarter 2024 results on Apr 24, before the opening bell. In the trailing four quarters, the company delivered an earnings surprise of 2.06%. In the last reported quarter, the company fell short of the Zacks Consensus Estimate by a penny.In the to be reported quarter, AT&T is swiftly moving ahead with its network modernization efforts by deploying Ericsson Cloud RAN technology on its commercial 5G network. It introduced a fixed wireless service called AT&T Internet Air, designed to provide Internet connectivity for businesses in remote locations.FirstNet Authority disclosed its plans to invest $6.3 billion through its network contract with AT&T and an additional $2 billion for ongoing investments in coverage enhancements for public safety. These developments are expected to have boosted the top line during the quarter. Management is placing strong emphasis on reducing operating expenses and improving efficiency. It is focused on expanding 5G and fiber connectivity, along with expanded reach of software-based entertainment platforms. However, fierce competition from other major players such as TMUS and Verizon, combined with macroeconomic headwinds and inflationary pressure, is hurting the top line.For the March quarter, our estimate for revenues from the Mobility Business is pegged at $21.44 billion, implying 4.2% year-over-year growth. Net sales from Consumer Wireline are pegged at $3.37 billion, implying a 3.9% year-over-year improvement. Revenues from Business Wireline are estimated at $5.18 billion, down 2.9% year over year. Postpaid net addition is expected to decline by 4.3% year over year.As of Dec 31, 2023, AT&T had $6.72 billion of cash and cash equivalents with long-term debt of $127.85 billion compared with respective tallies of $7.54 billion and $126.7 billion by the end of third-quarter 2023. This shows that while the debt burden has increased, the cash position has decreased on a sequential basis. The company currently has a debt-to-capital ratio of 0.54 compared with 0.56 for the sub-industry.