What analysts are expecting from carriers’ Q3 earnings: A preview

The third-quarter earnings season is starting. (Pixabay)

Verizon kicks off the earnings season on Tuesday morning with the scheduled release of its third-quarter financial results. AT&T follows on Wednesday morning, and T-Mobile and Sprint are scheduled to report their own respective third-quarter results next week.

So what are analysts expecting?

Here are the postpaid phone net customer addition predictions from two of the industry’s biggest Wall Street research firms:








Wells Fargo










Generally, the analysts are pointing to a relatively quiet competitive environment, as AT&T and Verizon specifically turn their focus toward profitability rather than market share.

“We expect total postpaid phone net adds for the ‘Big 4 + Comcast’ of 1.047MM vs. 1.251MM last year as the new iPhones released in mid-September appeared to have only a limited impact on customers switching carriers (we may see a greater impact from the release of the XR this month),” the analysts at Cowen wrote. “To that point, we expect upgrades to be flat to down vs. last year as well.”

Perhaps the main theme to glean from the reports from Wells Fargo and Cowen is that Sprint is facing an increasingly difficult road apart from a merger with T-Mobile.

“We now expect Sprint to lose both postpaid and prepaid subs in C3Q18, and as we note in our Wireless Survey, consumer sentiment on Sprint's brand/image appears to have meaningfully worsened over the past quarter,” the Cowen analysts wrote.

And the Wells Fargo analysts noted that Sprint raised the prices on its unlimited plans during the summer, which will likely cool subscriber interest in the company’s offerings. “We therefore expect to see net postpaid phone losses of -10K and total postpaid net losses of -10K,” the analysts wrote.

However, offering a ray of light for Sprint, the analysts at Cowen said they believe the odds are improving that Sprint and T-Mobile will be successful with their merger proposal: “We estimate the market assigned probability of the T-Mobile/Sprint deal closing is currently ~47% (using the 20-day average pre the April 10 WSJ article) while we ourselves are now assigning a 60% probability vs. 50% previously,” the analysts wrote. “Our greater expectation is driven by 1) a lack of comments/leaks suggesting the FCC/DOJ is looking to block the deal, 2) what appears to be an increasing government concern/rivalry with China including the race for 5G, and 3) an unclear willingness/ability by the carriers (especially Sprint) to invest in 5G without government coaxing (the deal would be the coaxing).”