New book by Larry Connors Click here Improve your trading - See how
Q3 Results
The Richardson, Texas-based company's third-quarter net income was $74 million or $0.21 per share, compared to $45 million or $0.13 per share in the year-ago quarter.
On average, 22 analysts polled by Thomson Reuters expected the company to post earnings of $0.09 per share. Analysts' estimates typically exclude special items.
The most recent quarter results included about $18 million related to the reduction of a state unrecognized tax benefit associated with the expiration of a statute of limitations.
Quarterly revenues advanced to $896 million from $687 million reported a year ago, and surpassed the $869.40 million revenue consensus estimate of 18 analysts polled by Thomson Reuters.
Services revenue for the latest quarter totaled $812 million, an increase of 33%, compared to $611 million reported in the corresponding quarter of the previous year. Equipment revenues improved to $83.3 million from $76.0 million in the prior-year period.
Roger Linquist, Chairman, President and Chief Executive Officer of MetroPCS, said, "In a seasonally slow quarter, we reported net additions that were below our expectations, due primarily to elevated churn and a deceleration in gross additions. We believe this was the result of continued U.S. macro-economic weakness, an increasingly competitive environment, and upward adjustments we made to the price of certain handsets."
Further, the company reported about 121 thousand net subscriber additions for the Northeast Markets during the third quarter. After enhancing its rate plans in August, MetroPCS recently unveiled additional marketing initiatives intended to address the evolving competitive marketplace.
Quarterly consolidated net subscriber additions during the latest quarter was 66 thousand, down from the previous year's net additions of 249.2 thousand.
Other Metrics
During the third quarter of 2009, average revenue per user, or ARPU, totaled $41.08, up $0.35 from the prior-year's $40.73, largely driven by favorable rate plan sales mix and its unlimited international calling plan launched in June 2009.
The company's cost per gross addition, or CPGA, of $153.94 for the recent quarter represents an increase of $25.73, compared to $128.21 reported in the year-ago quarter, led by the Northeast Markets segment related to the launches of service in the New York and Boston metropolitan areas in early 2009, coupled with increased promotional activities.
Cost per user, or CPU, for the quarter declined to $17.27 from $18.18 last year, primarily due to the company's continued scaling of the business, partially offset by costs associated with unlimited international calling product as well as expenses related to the ramp up of operations in the Northeast Markets.
Churn increased 100 basis points to 5.8% from 4.8% in the third quarter of 2008. The growth in churn rate was primarily related to incremental gross additions of 1.5 million customers during the nine months ended June 30, 2009, as compared to the previous year, coupled with churn from increased competition.
Total operating expenses for the recent quarter was $737.4 million, an increase from the $566.1 million incurred in the same quarter of last year. Cost of service rose to $298.3 million from $219.4 million last year, and cost of equipment increased to $199.1 million from $160.5 million in the year-earlier quarter.
Selling, general and administrative expenses totaled $138.5 million, versus $116.7 million incurred a year ago, while depreciation and amortization expenses rose to $98.9 million from $67.6 million in the previous year. Loss on disposal of assets increased to $2.57 million from $1.82 million in the comparable quarter of last year.
Segmental Analysis
The company's Core Markets segment generated third-quarter revenue of $809 million, up from $682 million reported a year earlier. Income from operations grew 44% to $238 million from $165 million in the third quarter of 2008. This segment ended the quarter with about 5.7 million subscribers and an 8.9% penetration rate, representing a 54 thousand decline in net subscriber additions in the third quarter and an increase of 853 thousand net subscriber additions since September 30, 2008.
Third-quarter revenues at the Northeast Markets grew to $87 million from $5 million reported in the comparable quarter of last year. The segment incurred a loss of $71 million, wider than the previous year's loss of $40 million. Northeast Markets had about 666 thousand subscribers and a 2.6% penetration rate, representing about 121 thousand net subscriber additions in the third quarter and an increase of about 622 thousand net subscriber additions since September 30, 2008.
FY09 Forecast
Given the view that the U.S. economy will continue to experience weakness through at least the end of the year and increased competition in the wireless market, MetroPCS reaffirmed its fiscal 2009 outlook for capital expenditures, currently expecting in the range of $0.7 billion - $0.9 billion. Further, the company now expects to reach unlevered free cash flow positive on a consolidated basis in late 2009.
MetroPCS currently expects net subscriber additions in the range of 1.0 million - 1.2 million for the full year. In addition, 2009 consolidated Adjusted EBITDA is now projected to range between $850 million and $950 million.
Earlier, the company had expected net subscriber additions in the range of 1.4 million -1.7 million for 2009, and consolidated adjusted EBITDA in the range of $900 million -$1.1 billion for the full year.
Citing the uncertainty in the economic and competitive environment and pending the development of MetroPCS' current and planned marketing and sales initiatives, the company said it is not providing financial guidance for fiscal year 2010.
Year-To-Date Highlights
For the nine-month period, the company reported net income of $405 million or $0.40 per share, compared to $135 million or $0.38 per share in the prior-year period.
Total revenues for the nine months ended September 30, 2009 were $2.55 billion, up from the previous year's revenue of $2.03 billion.
Peer Review
Among MetroPCS' rivals, Sprint Nextel Corp. (S | Quote | Chart | News | PowerRating) incurred a third-quarter loss of $478 million or $0.17 per share, wider than the net loss of $326 million or $0.11 per share last year, hurt by lower revenues mainly from its wireless segment due to subscriber losses. Net operating revenues declined 9% to $8.04 billion from $8.82 billion in the previous year.
Stock Quotes
MetroPCS shares, which have been trading between $6.05 and $18.98 in the past 52 weeks, closed Wednesday's trading session at $6.62.
For comments and feedback: contact editorial@rttnews.com Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
