Deutsche Telekom’s Dual Narrative: US Earnings Soar as German Labour Tensions Simmer

T-Mobile US beats Q1 forecasts with $20.5B revenue, while ver.di strikes disrupt Deutsche Telekom's German operations ahead of May 13 earnings report.

The Deutsche Telekom story is currently playing out on two very different stages. Across the Atlantic, T-Mobile US is delivering numbers that have analysts reaching for their calculators, while back in Germany, picket lines are growing and a bitter pay dispute shows no signs of resolution. Investors, for now, appear to be keeping their eyes firmly fixed on the US prize.

The US Engine Keeps Humming

T-Mobile US turned in a standout first-quarter performance, with service revenues climbing roughly five percent year-on-year to $20.5 billion — a figure that comfortably beat market forecasts. The US wireless giant posted earnings per share of $2.27, well ahead of analyst expectations, as postpaid subscriber additions accelerated. Given that Deutsche Telekom holds a majority stake in its American subsidiary — currently valued at around €90 billion — those profits flow directly into the parent company’s bottom line.

The strong showing has done little to lift the German stock, however. The T-share closed the final session of April at €27.57, a modest gain on the day but still hovering near the lows of the past month. Deutsche Bank Research and Barclays both reaffirmed their bullish stances in early May, with price targets ranging from €39.50 to €42.00. The market, so far, is not buying the optimism.

Strike Action Intensifies

The disconnect between the US success story and the German reality is largely down to labour relations. Trade union ver.di has turned up the heat, with more than 7,500 employees walking off the job across the country in recent days. The industrial action, which began in the north and east before spreading nationwide, is disrupting customer service and slowing network expansion.

The union is demanding a 6.6 percent wage increase for tens of thousands of tariff employees, plus an annual member bonus of €660. Apprentices and dual-study students are also in line for significant pay rises. Management’s decision to push ahead with a €2 billion share buyback programme has handed ver.di a powerful bargaining chip — the union argues the cash could just as easily fund higher wages.

The third round of negotiations is scheduled for May 11-12. If Deutsche Telekom again fails to table a negotiable offer, the union has warned it will escalate the strikes to cover more business areas. A fourth meeting is already pencilled in for late May.

What the May 13 Report Will Reveal

All eyes now turn to May 13, when the board presents the full first-quarter results. Analysts are forecasting adjusted earnings per share of around €2.17 for the full year 2026, and the quarterly numbers will provide an early reality check on that trajectory. If the European operations can match the US unit’s solid performance, the German labour dispute may well fade into a sideshow for shareholders.

The fibre rollout will also be under the microscope. Deutsche Telekom plans to connect roughly 2.5 million new households this year alone, part of a €30 billion investment programme running through 2030. The annual general meeting in April approved a record dividend of €1.00 per share, paid out on April 8.

Market technicians are watching the €26.00 support level closely. If that floor holds until the earnings release, the stock could enter the reporting week on a more stable footing. For now, the transatlantic tug-of-war between US earnings momentum and German labour strife looks set to continue.