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Recent developments regarding a major industry competitor have negatively affected the stocks of leading telecom companies Verizon (VZ -2.11%) and AT&T (T -2.67%). On Friday, both companies saw their stock prices decline by over 2%, contrasting sharply with the overall market, as the S&P 500 index rose by 0.6%. Both Verizon and AT&T are part of this index, adding to the discomfort of their respective investors.
A Disappointing Quarter
The company in question is T-Mobile US (TMUS -11.26%), which released its first-quarter results after the market closed on Thursday. While T-Mobile exceeded analyst expectations for both revenue and profit and even raised its future guidance, several troubling factors emerged. Notably, on a year-over-year basis, both revenue and profit showed no growth. Revenue experienced a decline of nearly 5%, dropping to just under $20.9 billion, while net income fell slightly to $2.95 billion.
On the operational front, T-Mobile reported 495,000 in postpaid net customer additions, outperforming AT&T’s latest figures and standing in stark contrast to the customer loss reported by Verizon. However, this number fell short of the anticipated 506,400 additions predicted by analysts.
Impact on Industry Peers
The three major telecom players—Verizon, AT&T, and T-Mobile—operate in a closely related market, offering similar products and services. As a result, the performance of one can significantly influence the others, especially in light of T-Mobile being the last to announce its quarterly results this earnings season.
Given T-Mobile’s lackluster performance, market analysts will be looking for some encouraging news from the company before its next earnings report. This anticipation likely extends to Verizon and AT&T as they also navigate the evolving competitive landscape.
Source
www.fool.com