MetroPCS 2Q Profit Rises 5.6% On Subscriber Additions

Date : 08/02/2011 @ 6:55AM
Source : Dow Jones News
Stock : Metropcs Comm. Dl-,0001 (PCS)
Quote : 11.84  0.0 (0.00%) @ 2:05AM

MetroPCS 2Q Profit Rises 5.6% On Subscriber Additions

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MetroPCS Communications Inc.'s (PCS) second-quarter earnings rose 5.6% as the prepaid wireless-service provider continued to add subscribers, though margins declined on higher costs.

MetroPCS, which offers flat-rate wireless services without annual contracts, simplified its plans and cut prices late last year, just as a larger number of new entrants hopped into the prepaid business. The moves, combined with launching a 4G network and offering smartphones, have attracted new customers, yielding stronger revenue and profit growth in recent quarters. In the latest period, net subscriber additions were 198,810 for a total of 9.08 million.

MetroPCS reported a profit of $84.3 million, or 23 cents a share, up from $79.9 million, or 22 cents a share, a year earlier. Revenue jumped 19% to $1.21 billion.

Analysts polled by Thomson Reuters had most recently forecast earnings of 28 cents on revenue of $1.23 billion.

Operating margin fell to 17.4% from 19.6%, reflecting a 19% increase in the cost of service and a 46% jump in the cost of equipment.

The customer turnover rate, known as churn, rose to 3.9% from 3.3%.

Average revenue per customer was up 1.6%, while the cost per user increased 5.8%.

The company raised its estimate of 2011 capital expenditures to between $900 million and $1 billion from its prior forecast of $700 million to $900 million.

Shares closed Monday at $16.18 and were inactive premarket. The stock has risen 77% over the past year.

-By Melodie Warner, Dow Jones Newswires; 212-416-2283;

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