Millicom's Q1 2025 Results: Strategic Shifts and Investor Implications

Millicom International Cellular SA (NASDAQ: TIGO), operator of the Tigo brand in Latin America, is set to release its first-quarter 2025 earnings on May 8, 2025. The results will be accompanied by a video conference for investors, offering critical insights into the company’s financial performance and strategic priorities. With a mix of operational challenges and ambitious targets, investors will scrutinize whether Tigo can sustain growth amid shifting market dynamics and strategic asset repositioning.

Financial Outlook: A Modest Dip in EPS Amid Strategic Divestitures

Analysts project a Q1 2025 EPS of $0.82, a slight decline from $0.87 in the prior-year quarter. This forecast reflects cautious expectations, given the company’s focus on strategic divestitures and margin management. While the EPS drop may raise short-term concerns, the broader context is key: Tigo has prioritized asset optimization to strengthen its balance sheet. For example, the recent sale of 321 communication sites to SBA Communications for $58 million—part of a larger $925 million deal—signals a shift toward trimming non-core assets to fuel liquidity and reinvestment in core markets.

Strategic Moves: Divesting for Growth and Shareholder Returns

The SBA transaction underscores Tigo’s strategy to monetize underutilized assets while maintaining its core telecom services. With 6,700 additional sites still slated for sale by September 2025, the company aims to reduce debt and boost equity-free cash flow—a metric it targets to grow to $750 million in 2025, up from $728 million in 2024. This liquidity will support initiatives like the $150 million share buyback program and a $3 per share dividend (yielding ~10.5% at current prices), which collectively aim to reward shareholders after years of operational restructuring.

Operational Momentum: Service Revenue and Market Penetration

Tigo’s mobile service revenue grew 4.6% in 2024, driven by data-driven offerings like Tigo Money (financial services), Tigo Sports (entertainment), and fiber broadband. These services now serve over 46 million customers across 14 markets, with a fiber-cable network reaching 14 million homes. The Q1 results will likely highlight progress in margin expansion, as cost discipline and digital service adoption offset macroeconomic pressures.

Investor Considerations: Volatility and Long-Term Potential

Historically, Tigo’s stock reacts dynamically to earnings. For instance, following its February 2025 Q4 results, shares initially fell 2.55% but rebounded +28.8% over 61 days, reaching $34.25. This volatility underscores the market’s sensitivity to strategic execution. Analysts currently hold a “Moderate Buy” consensus, reflecting optimism about Tigo’s cash flow resilience and shareholder-friendly policies.

Conclusion: A Strategic Crossroads

Millicom’s Q1 2025 results will test its ability to balance asset-light strategies with organic growth. The dividend yield, shareholder buybacks, and progress toward the $750 million cash flow target could allay concerns over the EPS dip. Investors should also watch for updates on the Coltel acquisition (Telefónica’s stake) and fiber expansion plans, which are critical to maintaining competitive edge in saturated markets.

With $2.3 billion in unappropriated reserves and a disciplined approach to deleveraging (targeting leverage below 2.5x), Tigo is positioned to navigate near-term headwinds. However, execution risks—such as regulatory delays in site sales or slower-than-expected margin improvements—could challenge its narrative. For now, the May 8 earnings offer a pivotal moment to assess whether Tigo’s strategic pivot is paying off.