T-Mobile US Set to Report Q3 Results Amid Revenue Contraction Fears

T-Mobile US (NASDAQ:) is slated to announce its Q3 2023 results on Tuesday, October 25th, following an 8.77% earnings surprise in the previous quarter. The forthcoming announcement comes amid expectations of a revenue contraction due to intensifying competition and weak demand.

In recent developments, the wireless carrier has been involved in several initiatives aimed at strengthening its market position. Notably, T-Mobile extended its partnership with SailGP until 2025 and implemented a unique 5G hybrid network at Boston Children’s Hospital in collaboration with Pixel Health. As Major League Baseball’s official wireless partner, the company also introduced new features at the MLB All-Star event.

Despite these efforts, profitability challenges loom over T-Mobile. Factors such as competition, low-priced service plans, promotional activities, and high debt obligations could affect the company’s bottom line. Analysts expect a year-over-year decline in both branded postpaid and prepaid Average Revenue Per User (ARPU).

The Zacks Consensus Estimate predicts total revenues of $19,347 million for the third quarter, marking a decline from last year’s $19,477 million. This includes estimated total service revenues of $15,458.5 million and equipment revenues of $3,710.4 million, which is a 3.8% YoY decrease. The adjusted EPS is projected to be $1.75.

T-Mobile’s Earnings ESP (Expected Surprise Prediction), a measure used to predict the likelihood of an earnings surprise, stands at -1.24%, accompanied by a Zacks Rank #3. In comparison, Alphabet (NASDAQ:) Inc., Motorola Solutions (NYSE:), and ON Semiconductor have Earnings ESPs of +0.89%, +3.58%, and +1.00% respectively.

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