The Growing T-Mobile (NYSE:TMUS) Market

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By Chris Hillman on October 29, 2014 Company, Market

T-Mobile International (OTCMKTS:DTEGY) is a holding company for Deutsche Telekom. Located in Bonn, its subsidiaries are spread throughout Europe. The company deal in GSM, UMTS and LTE based networks. T-Mobile (NYSE:TMUS) is present in 12 European countries which include Austria, Czech Republic, Germany, Croatia, Hungary, Macedonia, Netherlands, Montenegro, Poland, Romania, Slovakia as well as the United States, Puerto Rico and US virgin islands.

At this stage, the company has over 230 million subscribers, and within its last quarter for the year; it is aiming at taking the figure up to 250 million. In terms of subscribers, T-Mobile (NYSE:TMUS) is the fifth largest service provider worldwide, hence it is a company with a lot of growth potential and innovative offerings.

Last Monday, T-Mobile (NYSE:TMUS) US announced its quarterly figures, which were $0.12 earnings per share, and the revenue totaled up to $7.35 billion. The Thomas Reuters predictions were set at $0.02 and $7.42 billion. When looking back at the same quarter last year, the company had earnings per share at $0.03 and a $6.69 billion in revenue.

The company also revised its guidance for this year after these results were published. It now expects the year to close with additional 4.3 million to 4.7 million post-paid customers. This will be an increase from the previous 3.0 to 3.5 million customers, respectively, where the EBITDA and capital expenditures aren’t altered.

The company faced heavy net losses of $94 million this year, in comparison to just $36 million in last year’s third quarter. However, service revenues rose up by 10.6% to $5.684 billion this year. Equipment sales also rose by 6.4%, generating $1.561 in sales. Cost of service was also at a high of $1.488 billion, and cost of equipment sales were at $2.308 billion. Further SG&A expenses rounded up to $2.283 billion in the quarter.

According to sources, T-Mobile (NYSE:TMUS) considers this to be its best quarter for the year, with 1.4 million postpaid net additions, which is double the amount compared to the last quarter. Prepaid net additions also rose 4 times as compared to last year to an impressive 411,000.

In September, we saw the company issuing a combined $3.0 billion notes for registered public offering. $1.3 billion with 6% senior notes are due in 2023, whereas $1.7 billion aggregated amount with 6.375% is due in 2025. But in October, the company spent $1.0 billion of debt in order to repay its outstanding 7.875% senior notes to be due in 2018.

Keeping all these statistics in mind, Morgan Stanley (NYSE:MS) estimated T-Mobile (NYSE:TMUS)’s price target to be $31. On Monday, the shares closed at $27.99, but on Tuesday morning, there was an increase of 2.5% to $28.68 in trading. The market consensus for the future is a target price of $35.58 and a 52 week trading, ranging from $24.50 to $35.50. The Market cap for T-Mobile (NYSE:TMUS) is of $22 billion.

The fourth quarter seems bright for T-Mobile (NYSE:TMUS) at this stage according to various predictions made by the analysts.