What to expect from U.S. wireless carriers' Q4 results

The fourth quarter earnings season in the US is about to get underway, with AT&T, Verizon and T-Mobile all scheduled to report their latest financial results starting January 23. In general, analysts expect the good times will continue.

Indeed, all the big US wireless network operators have enjoyed positive attention from Wall Street in recent weeks. Since October 18, Verizon’s shares today are up 29%, AT&T’s shares are up 21%, and T-Mobile’s shares are up 17%. In comparison, the S&P 500 is up just 10%.

The financial analysts at TD Cowen attributed the gains to a handful of factors, including trading rates and improving sentiments among shareholders.

However, the financial analysts at Morgan Stanley noted that operators’ recent gains haven’t fully offset the worries that dragged at much of 2023.

“While telco stocks rebounded nicely to end the year, they still lagged the broader market by over 20% in 2023 as competitive fears and lead sheathed cable concerns weighed on the sector earlier in the year,” they wrote in a recent note to investors.

Further, most analysts agree that the most important item to watch in operators’ upcoming fourth quarter earnings reports is what they have to say about this year. “Much of the focus will be on formal 2024 guidance,” the Morgan Stanley analysts wrote.

Here’s what to look for in wireless carriers’ Q4 reports:

Postpaid phone gains

Most analysts expect T-Mobile to continue to lead the pack in terms of net postpaid phone customer additions. That’s important because postpaid phone customers are considered the most valuable type of wireless customer in the market.

TD Cowen predicts T-Mobile will report 860,000 such customers in the fourth quarter of 2023, followed by Charter Communications with 535,000, AT&T with 506,000, Comcast with 335,000 and Verizon with 230,000.

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